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Tuesday, February 5, 2008

More cross-border REITs on the horizon

PETALING JAYA: More cross-border, joint venture real estate investment trusts (REITs) are expected this year, following heightened interest from foreign investors, said Datuk Mohamed Azahari Mohamed Kamil (pix), managing director of AmanahRaya-JMF Asset Management Sdn Bhd (manager of AmanahRaya REIT).

“There is Middle East interest to list their properties through REITs in Malaysia and Singapore,” he said, adding that the average yield of 7% and 4.9% for REITs in Malaysia and Singapore, respectively, are considered attractive to investors who seek long-term investments with stable returns in the real estate sector.

He was speaking as a panelist at the recent REIT Review Asia 2008 conference in Singapore.
Other key speakers included ParkwayLife REIT CEO Justine Wingrove and Peter Churchouse, the property director of LIM Advisors Hong Kong.

According to Mohamed Azahari, Singapore and Malaysia currently dominate the South East Asia REIT markets with a total market capitalisation of about US$22 billion (RM72 billion), and this is expected to increase consistently with more investors considering REITs for their portfolio.

“With the recent sub-prime mortage and banking crisis, there will be opportunities for asset managers to conduct portfolio rebalancing and we believe that REITs will continue to be preferred in view of their defensive risk profiles,” he said.

He added that liquidity is still the main consideration for investors and REIT managers’ continuous efforts to grow the funds and improve yields are helping to attract investors.

“The credibility of the sponsors who are able to identify properties in the pipeline for future acquisition by REITs also generates further interest among investors,” he said.

AmanahRaya REIT is the second largest REIT in Malaysia, with assets of RM645.52 million. It recently collaborated with Gapuraprima Group, an Indonesian developer listed on the Jakarta Stock Exchange, and aims to list a regional REIT in Singapore this year.

By theSun (by Yap Yew Jin)

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