Hong Kong: New subsidy for listing of H-REITs

In brief

In a recent press release1, the Securities and Futures Commission (SFC) published details2, Frequently Asked Questions3, and application forms4 for the new grant scheme to subsidise the expenses incurred by Hong Kong real estate investment trusts (H-REITs) successfully listed in Hong Kong ("Grant Scheme").

Subject to certain conditions, the Grant Scheme will cover 70% of eligible expenses paid to Hong Kong-based service providers ("Eligible Expenses") subject to a cap of HKD 8 million per H-REIT.5

The Grant Scheme represents a further important step in ongoing enhancements and incentives to promote H-REITs and reinforce Hong Kong's role as a leading capital-raising venue and international asset management centre. We discuss the scheme requirements in more depth below.


In more detail

The Grant Scheme was first proposed in the 2021-2022 Budget Speech6 by the Financial Secretary ("Financial Secretary") of the Government of the Hong Kong Special Administrative Region7 and both market participants and service providers alike have been eagerly awaiting publication of details regarding eligibility, scope and the application process. The key aspects of the Grant Scheme include the following:

What is the application period?

The application period commenced on 10 May 2021 ("Effective Date") and ends on 9 May 2024, but may end sooner if all of the funding for the Grant Scheme has been exhausted prior to this date.

Who is eligible to apply?

  • SFC authorised H-REITs listed on the Stock Exchange of Hong Kong Limited (SEHK) on or after the Effective Date with a minimum market capitalisation of HKD1.5 billion (or equivalent) at the time of listing.8
  • The H-REIT manager should make the application on behalf of the H-REIT.

What are the Eligible Expenses under the Grant Scheme?

The following broad categories of expenses paid to Hong Kong-based service providers in connection with the listing of the H-REIT are eligible for the subsidy:

  1. Underwriting commissions
  2. Listing agent fees
  3. Legal fees
  4. Auditors, accountants and/or tax advisors fees
  5. Property valuation fees
  6. Promotional expenses paid to marketing agencies or consultants, including roadshow expenses

Are there any limits to the amount of Eligible Expenses that can be subsidised under the Grant Scheme?

The grant amount is limited to 70% of the Eligible Expenses and capped at HKD 8 million per H-REIT.

What is the application process and is there a time limit to make an application under the Grant Scheme?

H-REIT managers should submit an Application for the Grant Scheme to the SFC within three months after the H-REIT listing date.

Is a Grant Scheme subsidy subject to any clawback arrangements?

  • Any subsidy provided under the Grant Scheme can be clawed back if the H-REIT is delisted or suspended from trading within two years of its listing date.  
  • The reasons for any trading suspension will be considered on a case-by-case basis to determine whether a clawback should apply.
  • A temporary trading suspension due to pending announcements will not generally result in a clawback.
  • A clawback may apply if an H-REIT has been suspended from trading for a continuous period of 18 months within two years of its listing date – consistent with the powers of the SEHK under the Listing Rules to cancel the listing of any security in such circumstances.



The Grant Scheme provides a welcome benefit and has the potential to materially reduce the costs of establishing H-REITs, providing a further compelling argument to consider Hong Kong as a domicile of first choice.

We will continue to monitor further developments in the H-REIT regime. To discuss how our experience with H-REITs can assist you, or if you have any questions on any of the matters above, please do not hesitate to liaise with your usual contact at Baker McKenzie or the lawyers listed in this Alert.

1 https://apps.sfc.hk/edistributionWeb/gateway/EN/news-and-announcements/news/doc?refNo=21PR47

2 https://www.sfc.hk/-/media/EN/files/ER/PDF/OFC-and-REIT-Grant-Scheme--PR-AttachmentEN.pdf

3 https://www.sfc.hk/-/media/files/PCIP/FAQ-PDFS/FAQ-on-OFC-and-REIT-Grant-Scheme__20210510.pdf

4 https://www.sfc.hk/en/Forms/products/Investment-products-Forms-and-checklists#section10

5 https://www.sfc.hk/-/media/EN/files/ER/PDF/OFC-and-REIT-Grant-Scheme--PR-AttachmentEN.pdf

6 https://www.budget.gov.hk/2021/eng/speech.html

7 Please refer to our earlier client alert on this topic for more information available at : https://insightplus.bakermckenzie.com/bm/financial-institutions_1/hong-kong-cost-subsidies-to-set-up-or-re-domicile-open-ended-fund-companies-announced-as-part-of-budget-measures

8 For a REIT which is also listed outside Hong Kong, the minimum market capitalisation of its units listed on SEHK should be HKD 1.5 billion (or equivalent) at the time of listing.

Contact Information
Aaron Dauber
Registered Foreign Lawyer/Knowledge Lawyer
Hong Kong

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