Besides investing in physical properties, be they commercial or residential, landed or strata, there are other ways to invest in properties that us regular folk would never normally be able to afford, like skyscrapers, shopping malls or private medical centres – that is, through real estate investment trusts (REITs). Here, we’ve compiled the latest news from end of April 2016 concerning Malaysian REITs that might be able to help you decide which REITs to invest in this year.

MREIT comparison

Sunway REIT’s net property income up 16.2% in 3Q
Sunway Real Estate Investment Trust (REIT) saw its net property income for 3QFY16 rise 16.2% to RM96.69 million compared to a year ago, on strong growth in the retail and hotel segments. This was, however, partially offset by lower performance from the office segment. Sunway REIT said revenue for 3QFY16 rose 17.7% to RM130.35 million from RM110.71 million, as average occupancy at Sunway Putra Hotel improved following the completion of its refurbishment in December 2015. Net profit, meanwhile, increased 14% to RM64.77 million from RM56.82 million. Sunway REIT Management Sdn Bhd CEO Datuk Jeffrey Ng said that despite the challenging market, the resilient assets located in Sunway Resort City has held up the overall performance of Sunway REIT. Sunway Pyramid Hotel East is temporarily closed effective this month for 10-month refurbishment and will be re-opened in the first quarter of 2017. (The Edge Markets)

Renewals and festive spending drive IGB REIT 1Q net profit
IGB REIT ended its first quarter (1QFY16) with realised net profit of RM72.8 million, driven by revenue growth on the back of stronger rental income, renewals at Mid Valley Megamall and higher turnover sales from the festive season in February. This resulted in a 4% y-o-y expansion in net property income. Quarter-on-quarter (q-o-q), realised net profit was up 37% q-o-q due to higher revenue, lower overheads as well as a dip in interest expense. Despite the country’s overall weaker consumer sentiment, IGB REIT managed to consistently maintain its occupancy rates at 100%, in addition to efficient cost management initiatives, and the fact that both Mid Valley Megamall and The Gardens Mall are key suburban shopping destinations. (The Edge Markets)


Pavilion REIT NPI up to RM75.6mil in 1Q
Pavilion REIT’s net property income for 1QFY16 stands at RM75.64 million, up from RM72.94 million in the same quarter a year ago. It’s net profit was up by 1.62% to RM61.47 million in the same quarter last year, mainly due to higher NPI. The retail environment continues to be challenging due to weak consumer confidence and inflationary pressures. Marketing efforts will persist to drive traffic to retail malls and encourage spending. Leasing continues to enhance the required tenant mix that is relevant to the properties under Pavilion REIT. Its management will continue with the REIT’s growth strategies, such as proactive management of investment properties and implementing asset enhancement properties, as well as active pursuit of acquisition opportunities. (The Edge Markets)

Related article: Malaysian REITs outperform FBM KLCI in April 2016

Pavilion REIT likely to continue acquisition streak
Pavilion REIT is likely to continue its trail of acquisitions, with the soon-to-be-completed Pavilion Extension, to which it has the right of first refusal (RoFR), as well as the 300,000 sq ft Fahrenheit88 mall. Both are currently held by major shareholders of Pavilion REIT. Pavilion Real Estate Investment Trust’s (REIT) da:men USJ mall opened its doors on Jan 8 with more than 50% occupancy, and its management is positive about the mall’s prospects. The REIT has completed its acquisition of da:men USJ and Intermark Mall in 1Q16, which are expected to generate net property income of RM31.1 million for FY16. (The Edge Markets)

pavilion REIT 2015-2018

Challenging rental market to impact Axis REIT
Axis REIT reported a net profit of RM22.2 million for 1QFY16, a 1.5% decline year-on-year, mainly due to the prolonged vacancy rate of 8%. Its rental income for the first quarter was up 1.7%, attributable to the slow take-up vacant NLA. Otherwise, its revenue has been driven by expansion of its portfolio, as well as recurring rental income. Affin Hwang Capital believes that the rental market will remain challenging in 2016, given the pipeline of incoming supply in the market, while business sentiment remains lacklustre. This may have a negative bearing on Axis REIT, given the upcoming renewal of some key tenants at Menara Axis, Crystal Plaza, Wisma Kemajuan, Emerson Nilai and SPLC3. New office supplies as well as potentially lower rental rates in suburban locations could spur a relocation of some tenants. (The Edge Markets)

Axis REIT looking to East Malaysia for acquisitions
Axis REIT’s target to increase its asset size to RM3 billion may take the industrial property REIT to East Malaysia for the first time, given the prospects of improving economy in the region and major infrastructure upgrades. Axis REIT chief executive officer Leong Kit May noted that with Lazada Malaysia opening a warehouse in Sarawak, it would be the right time to capture opportunities in e-commerce industrial properties in East Malaysia. The REIT had announced that its focus this year would be on acquiring industrial assets and the e-commerce industry. Industrial properties in East Malaysia are looking more attractive now due to the upcoming Pan Borneo Highway and improving infrastructure. Axis recently completed the purchase of four properties in Iskandar Malaysia, Johor and is in the midst of finalising the purchase of two more industrial properties this year. (The Edge Markets)

Axis REIT 2014-2018

Related articles:

  1. Common Questions & Answers About REITs
  2. Different Types of REITs in Malaysia
  3. Why Invest in Malaysian REITs?
  4. What is a REIT?