Two largest REITs may be postponed

CapitalLand paid RM770mil to buy Gurney Plaza in Penang.

PETALING JAYA: The proposed listing of the two largest real estate investment trusts (REITs) on Bursa Malaysia in terms of asset value will likely be postponed to next year if the weak market conditions continue.

Analysts said the current lacklustre mood on the local bourse could drag to the middle of next year as the full impact of the US financial crisis took its toll on equity markets around the world.

“REIT sponsors will not want to proceed with listing plans and will wait until the market improves before going ahead with the launch of their REIT,” an analyst with a local brokerage told StarBiz.

Singapore’s CapitaLand Ltd, which earlier planned to list its pure play retail REIT on Bursa by year-end, may delay the exercise if the current weak market conditions persist.

According to a company spokesman, the timing for the proposed listing of its REIT was subject to market conditions.

“We note the extremely negative market conditions currently and are watching the market situation carefully. We will provide any material update on the listing plans when appropriate,” he said in response to a query on the company’s listing plans.

CapitaLand’s plans to list a REIT with RM2bil of assets will see the country’s first foreign-sponsored REIT on Bursa.

The company will group its shopping mall assets in Malaysia for the trust.

One of Asia’s largest real estate firms, CapitaLand had last August paid RM770mil to buy Gurney Plaza in Penang and RM435mil for the Mines Shopping Fair in Seri Kembangan, Selangor.

Its latest acquisition was a 61.9% stake in Sungei Wang Plaza for RM595mil in June.

HwangDBS Vickers Research said Sunway City Bhd (SunCity) also looked likely to delay the launch of its REIT to next year in view of the current market sentiment.

With RM3bil worth of assets, the SunCity REIT will be the country’s first listed integrated resort REIT.

By The Star (by Angie Ng)