AmanahRaya to diversify into Islamic REITs

KUALA LUMPUR: AmanahRaya-JMF Asset Management Sdn Bhd, which currently manages RM7.5bil in funds, is looking at going into Islamic real estate investment trusts (REITs) in the next two or three years, says managing director/chief executive officer Sharizad Jumaat.

“We would like to go into Islamic REITs. What we can do is, we want to dilute it (the non-syariah components). As we get bigger, the size of the non-syariah (components) becomes smaller,” she told Bernama in an interview.

Under syariah guidelines, the REIT can be considered syariah-compliant if the value of non-syariah components is less than 20%.

Sharizad said currently, about 25% of AmanahRaya’s revenue from REITs were contributed by non-syariah components.

”If the market stabilises by end-2009 and we continue with acquisitions in 2010, we should be able to dilute (non-syariah components) by 2011,” she said.

On the delay in the injection of new properties into AmanahRaya REIT, Sharizad said the company was taking a defensive approach to maximise the potential returns to unitholders.

”Until now, the property value is about RM645mil. With the third (property) injection, we can easily hit RM1bil,” she said.

Sharizad said there were still opportunities available despite the current economic condition.

“Our properties are not badly hit as countries like Britain, the United States, Singapore and Hong Kong where property values have dropped 20%-30%. Our market has declined by less than 5%,” she said.

By The Star