The local stock exchange could see an increase in Real Estate Investment Trust (REIT) listings. This is a promising opportunity for investors seeking stable and lucrative investments. REITs provide diverse portfolios spanning sectors such as retail, office, industrial, and hospitality, effectively reducing risk and insulating against market volatility in any one sector. Analysts predict that more property developers in Malaysia may turn to REIT listings.
RHB Research noted that this
trend is likely to continue, especially as declining interest rates generally
benefit REITs, particularly for companies with a substantial pool of investment
properties. Among the developers eyeing
REIT listings are IOI Properties Group Bhd (IOIPG) and SP Setia Bhd.
Source: https://en.wikipedia.org
Sime Darby Property has built a significant cache of retail assets, including KL East Mall, which now yields 6.5 per cent to 7.0 per cent after three to four years of operation, Senada Mall, set to open in the second half of 2025, and Elmina Lakeside Mall. In the logistics sector, Sime Darby Property's Metrohub in Bandar Bukit Raja is gaining momentum. Metrohub 2 is complete, with tenants Comone Express and JD Logistics occupying 25 per cent of the 800,000 square feet space, with room for expansion.
Meanwhile, Metrohub 1, expected to complete by the fourth quarter of 2024, has already secured 50 per cent occupancy, covering 1.1 million square feet of net lettable area (NLA). By the first half of 2024, Sime Darby Property had accumulated 7.7 million square feet of NLA in investment properties, two million of which are industrial properties.
RHB Research valued the company's total assets under management at RM2.6 billion (excluding concessions) as of fiscal year 2023. The completion of the Google Data Centre (DC) in 2026 is expected to further enhance Sime Darby Property's asset portfolio by an additional RM1.5 to RM2 billion. The company's property investment, leisure, and hospitality segments currently generate an annualised revenue of approximately RM220 million, RHB Research said.
It is good news for retail
investors as they have a better opportunity to invest with yields above 6% p.a.
This is an attractive option compared to fixed deposits or other fixed income structures.
Hopefully, market sentiment continues to improve and create opportunities for
REITs.
Reference:
More
REIT listings anticipated in Malaysia, Sharen
Kaur, NST, October
14, 2024
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