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Mall, Office REITs Look Attractive As Recovery Play In Malaysia (The Star)

October 11, 2021 – The resumption of economic activity amid the easing up of lockdown restrictions has seen equity analysts maintaining their upbeat outlook on Malaysian real estate investment trusts (REITs), particularly in the retail and office segments.

Kenanga Research believes the fourth quarter of 2021 should see a significant improvement for the retail segment’s earnings in the form of revenge shopping and hospitality segment from an uptick in local holiday stays.

“Investors should be looking ahead to normalised financial year 2022 (FY22) earnings.

“The quick rollout of vaccinations and the resumption of most economic activities are well within our expectation of a fourth-quarter 2021 earnings rebound,” says Kenanga Research.

The research unit points out that the economy had begun opening up in August and September 2021, with most malls currently operating at 80% to 90% of net lettable area (NLA), versus only 15% to 25% in the second quarter of 2021.

The research unit also notes that the office and industrial segments under its coverage have been fairly stable, as businesses were able to operate effectively on a work-from-home (WFH) basis without significant disruptions to operations.

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