Mideast investors keen to list REITs in Malaysia, Singapore

MIDDLE Eastern investors are keen to list property trusts in Malaysia and Singapore, said AmanahRaya-JMF Asset Management Sdn Bhd Datuk Mohamad Azahari Moha-med Kamil.

Singapore and Malaysia dominate the real estate investment trust (REIT) market in Southeast Asia, with a total market value of about US$22 billion (RM71.28 billion), he said in a statement.

Malaysian REITs have yields of around seven per cent, which is attractive to investors, especially for those who seek long-term stable return investments in the real estate sector.

"While Singapore, considered as a developed market for REITs, currently has weighted average yield of 4.9 per cent," he said.

Malaysia has some 11 REITs listed on Bursa Malaysia with a market value of about US$1.6 billion (RM5.18 billion). There is also a lot of growth potential as REITs are still buying assets to expand while new ones are preparing to get listed, he said.

Azahari attended the REIT Review Asia 2008 conference held in Singapore last Wednesday. Earlier on Tuesday, he was one of the panelists discussing REIT markets in Malaysia, Singapore and Hong Kong.

Azahari said liquidity is still investors' main consideration when looking at REITs, which means that the size of a trust matters.

They also look at a REIT's strategy to grow and improve yield.

"The only Malaysian REIT rated by Standard & Poors' as investable grade, AmanahRaya-Reit in 2007 had demonstrated a fine example of an attractively managed REIT that saw its asset size successfully increasing to almost double, its gearing reduced, and its projected yield improved by 50 basis points, all within less than a year after its listing on Bursa Malaysia."

AmanahRaya has tied up with Gapuraprima Group, a reputable Indonesia developer listed on the Jakarta Stock exchange. They are targeting to list a regional REIT in Singapore this year.

"We are expecting a consistent increase in the market capitalisation in Singapore and Malaysia, and we are confident that more investors will consider investing REITs in their portfolio.

"With the recent sub-prime, credit crunch and banking crisis, there would be opportunities for asset managers to conduct portfolio rebalancing and we believe that REITs will continue to be preferred in view of its defensive risk profile," he said.

By New Straits Times