Stapled Securities Singapore — What They Are and How They Work on SGX

Stapled securities Singapore are investment instruments where two or more separate securities — typically a REIT and a business trust — are bound together and traded as a single unit on the Singapore Exchange, giving investors exposure to both components simultaneously.

This article is for informational purposes only and does not constitute financial advice.

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What Are Stapled Securities?

Stapled securities are a unique structure common in Singapore and Australia where two (or more) legally distinct entities are bundled into a single traded unit. You cannot buy or sell one component without the other — they are “stapled” together and trade under a single SGX ticker.

In Singapore, the most common structure is a REIT stapled with a business trust. The REIT holds the real estate assets and qualifies for tax transparency (no corporate tax on distributions). The business trust holds operating assets or activities that may not qualify for REIT status — such as hotel management contracts, development activities, or higher-risk operating businesses.

This structure was designed to give issuers flexibility — the REIT portion provides stable, tax-efficient rental income, while the business trust component allows the structure to undertake activities that a pure REIT cannot, such as active property development or hotel operations.

Examples of Stapled Securities on SGX

Several major listed entities on SGX use the stapled securities structure, as at Q1 2026:

Note that not all S-REITs are stapled securities. Many pure REITs (like Mapletree Industrial Trust or Keppel DC REIT) are single-entity structures. Stapling is specifically used when the underlying business requires activities beyond a standard REIT’s permitted scope.

How Distributions Work for Stapled Securities

When a stapled security distributes income, unitholders receive a combined distribution comprising both the REIT component (tax-transparent) and the business trust component (taxed at corporate level before distribution).

Because the business trust component is a separate legal entity and is taxed differently, its distributions may be less tax-efficient than the REIT component. However, for individual Singapore investors, REIT distributions are already tax-exempt at the investor level (as at 2026), so the practical tax impact of the business trust component is relatively small for most retail investors.

Always check the distribution announcement to see the breakdown between REIT and business trust distributions, as each component has different accounting and tax treatment.

Risks and Considerations

Complexity: Stapled securities are more complex than pure REITs. Investors must analyse two separate balance sheets, two sets of financial statements, and understand how income flows between the components.

Lower tax efficiency of business trust component: Business trusts pay corporate tax on income before distribution, which reduces the distributable amount compared to the REIT component.

Operational risk: The business trust component often holds operating businesses (e.g., hotel management) which carry higher operational risk than passive rental income.

No separation: Because the components are stapled, you cannot hold only the REIT and exclude the business trust. If one component performs poorly, it affects the combined unit price.

Stapled Securities vs Pure REITs — Which to Choose?

For Singapore retail investors focused on passive income, pure REITs generally offer cleaner structures and more straightforward analysis. The tax transparency of a pure REIT means 100% of qualifying income is distributed without corporate tax drag.

Stapled securities may suit investors who want exposure to operating businesses alongside real estate, or who favour specific sectors (like hospitality) where the stapled structure is predominant.

Key questions to ask before investing: What percentage of total income comes from the business trust vs the REIT? Is the business trust profitable? Does the manager have a track record of growing both components?

For more on S-REIT structures, visit The Kopi Notes S-REIT Guides.

Frequently Asked Questions

Disclaimer: Content on The Kopi Notes is for educational purposes only and does not constitute financial advice.