Yet Another Exciting Development in Malaysia REIT Investment

The rapid growth of Malaysia’s REIT has just been highlighted in my post, just a few days ago – REIT Investment Outlook @ Malaysia June 2012. Now, there is another exciting development for M REIT investment.

During the webinar launch of REITMethod back in May 2012, I mentioned about the listing of IGB REIT in September 2012. Heck, this is actually old news as many avid investors would have known this upcoming REIT investment opportunity earlier of the year.

But we certainly never anticipate that IGB Corporation Berhad has another thing up its sleeve – to spin two more REITs in the next five years. That means it would ultimately like to have a hospitality REIT and an office REIT, but the exact timeline for this to happen is undetermined (what a bummer!)

This is not suprising albeit a pretty ambitious move – because IGB is a property developer which also operates hotels and manages office buildings.

Trivia: How does listing of a REIT occur under its sponsor?

Answer: By selling its assets to the REIT. For instance, IGB Corporation , which currently holds about three quarter stake in Kris Assets, the “owner” of Midvalley Megamall and The Gardens, will sell the RM 4.6 billion shopping complexes to IGB REIT.

reitmethod igb reit

IGB’s stake in the soon-to-be-listed trust will reduce to 51 percent. The dilution of the ownership would give IGB RM800 million of free cash flow, following the listing exercise.

Now, you tell me if M-REIT industry is playing a serious catch-up to S-REITs?

And also, it turns out, the emergence of another retail REIT is imminent.

In my REIT Investing Outlook Report May 2012 (you can download it free by clicking here), I briefly ponder over the prospect of the listing of another REIT in the near future – KLCC Property

invest in reit - KLCC reit

And this is the news you see today – 29 June 2012. Excerpt from The Star business news.

KUALA LUMPUR: KLCC Property Holdings Bhd (KLCCP) is exploring the setting up of a real estate investment trust (REIT) or equivalent to optimise shareholder value.

It said on Thursday it had authorised the management of KLCCP to explore a corporate structure including an appropriate REIT or equivalent.

It is just a matter of time before it becomes reality.

So, do you think REIT investment is something you would consider, given these exciting development?

Source: Business Times Malaysia

This Post Has 3 Comments

  1. Yes, Kris…am seeing a trend here, especially for retail REIT. It’s the same for Pavilion REIT last year too.
    The valuation, according to the REIT report, are independent valuation. For example, for CMMT portfolio, the valuations are done by external company like CB Richard Ellis and PPC International.

  2. One thing to take note is also how these company do valuation on their own property that is going to be injected into the REIT. Doing a REIT exercise is an easy way to extract capital from the investors. 🙂

Leave a Reply

HowToFinanceMoney © 2011-Present. All rights reserved.