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Wednesday, August 1, 2012

AmMutual open to more REIT buys

KUALA LUMPUR: AmMutual, which is positive on the Asia-Pacific real estate investment trusts (REITs) market, is keeping its options open on buying more REITs in the region, but much will depend, among others, on the liberalisation of a country's REITs regulation.

Its chief investment officer for equities Andrew Wong said the company would buy properties for REITs investment in any country in the region where REITS regulations were liberal, adding that this was one of the important considerations in the REITs business.

Wong says AmMutual will focus on the Asia-Pacific market in the next 12 months.

AmMutual is the conventional unit trust brand that is managed by the AmBank Group.

Besides this, he said the company would also look into countries where the demand for property REITs exceeded its supply, as well as the liquidity requirement in terms of liquidity risk when it exits certain properties in the region.

He was speaking at a media briefing on investments in Asia-Pacific REITs.

Currently AmMutual, via its wholly managed property fund - AmAsia Pacific REITs - has property REITs, in Australia, Singapore, Japan, Thailand, Hong Kong and Malaysia, among other countries.

It is also looking to buy REITS in countries in the region where the economy is starting to thrive.

Wong said the company's exposure to Malaysian REITs at present was about 7% and that it would consider buying others if the price was right, noting that it was also eyeing the soon to be listed IGB REITs.

For the next 12 months, he said the focus would still be on the Asia-Pacific region.

On the type of Malaysia REITS, he said the company was comfortable and keen on retail REITs, neutral on office REITs, partly due to the over-supply situation and mindful on logistics because of the liquidity of its REITs universe.

For the liquidity level of the REITs stocks, he said the company's cut-off point was preferably those with a minimum RM1.5bil in market capitalisation.

AmAsia Pacific REITs has raked in total returns of 20.8% to date since its inception on July 18 last year.

The property REITs fund also has an annual average dividend yield of about 6% and is the only fund in Malaysia to solely invest in the Asia-Pacific REITs.

On the challenges of REITs, Wong said this would be closely linked to the state of the economy and foreign direct investments.

Apart from this, the demographics of a particular country, for example its immigration laws, are important as this would entice people and investments into the country.

By The Star

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