Malaysia REIT

Last update: 31 Jan 2013

Will Reits continue to rally? Follow the latest article from the Edge here.

Newly launch REIT - Mid Valley Megamall and The Gardens Mall (with combined net lettable area of 2.5 million sq ft and over 650 tenants) - know as IGB REIT 
Listing Date: 21 Sep 2012, with the closing price RM1.39 above the IPO price of RM1.25.

Below are the price of REIT as of 18 Apr 2012:

p/s: If you want to trade REIT (buy and sell for short term), only CMMT is recommended, as it always move within range of 4 to 5 cents.

What is REIT?
REIT stand for Real Estate Investment Trust, is a form of company which buy or own physical properties with the purpose of rent it out to collect the income. Some of these properties include hotel, office, warehouse, retail malls and hospitals. In Malaysia, this kind of company need to distribute at least 90% of their profit as dividend to all share holders so that they can enjoy the tax benefit. As of last year, the average dividend for REITs are at the range of 6 to 8%, which is about 2 times more that Bank's FD.

Why invest in REIT?
One can buy physical asset if he have a lot of money, own not only one building, but few buildings in order to diversified the properties. The problem is how many of investors can do that. Beside of large capital, he need to hire a team to manage the building, take care of building maintenance and collect the monthly rental. With investment in REITs, we do not run into hassle of these. Ask a question, do you want to have consistent income every month? Do you want to own a company that will collect consistent income every month?

The REITs investor will have lesser risk as the burden is shared by a lot of investors in order to diversified into few properties with a large scale business. Beside, one can sell the shares anytime, take the cash after 3 working days, which quite hard to do that if you own physical asset.

Where to buy REIT?
You can buy share of REIT through Bursa Malaysia, similar to buying any stocks. For the new share, you can apply through IPO application process, consult your dealer or stock brokers for details.

How REITs are priced?
Since Reits are listed in stock market, the price will change base on demand and supply of buyer or seller. Most of REITs will provide the NAV, by theory, REITs price will follow close to NAV. Another way investor view the REITs is by checking on the Dividend Yield, how much expected dividend base on % and compare with Bank's FD Rate.

REITs Strategies
Short term – We have investors who like to take the opportunity buy 1 month before the dividend announcement. When the date near the dividend announcement, usually the REITs price will go up.

Long term – Investor buy REITs and hope for something better than FD's return when there's no opportunity to buy good stocks. Time come when market crash, many blue chip stock discount at10 or 20% or more. This is good opportunity to switch from REITs to Blue Chip stock.

CapitaMalls Malaysia Trust (CMMT)

Asset: Gurney Plaza, The Mines, Sungai Wang, East Cost Mall

Asset Type: Diversified
Period: FY11 - IPO

Asset: Diversified
Period: Q2 Jun 

Asset: Industrial Warehouse
Period: Q2 Jun 

Asset Type: Office
Period: 2H Mar 

Asset Type: Health care
Period: 1H Jun

Asset Type: Office
Period: Q2 Jun 

Asset: Mahkota, Subang, Watex
Period: Q4 Dec 

QCapita Reit
Asset Type: Office

Asset Type: Office
Period: 1H Jun

Asset Type: Office
Period: 1H Jun