Commercial & Industrial Property News Update

Asia Pacific - AmMutual To Focus On Asia Pacific REITs For Next 12 Months

August 3, 2012

AmBank Group's conventional unit trust AmMutual is confident of good opportunities to be found in Asian commercial real estate.

For the next 12 months, AmMutual will focus on the Asia Pacific region. The conventional unit trust belonging to AmBank Group is positive on the Asia Pacific real estate investment trusts (REITs) market and is seeking to expand its acquisitions in the region. However, the company said that it's buying decisions would also depend on the liberalisation of a country's REITs regulation.

Chief investment officer Andrew Yong said that AmMutual would buy properties for REITs investment in any Asia Pacific country as long as its REITs regulations were liberal, as this was a crucial consideration in the REITs business.

In addition, Yong said that the company would also consider countries with higher demand than supply for property REITs. Also considered would be regions with favourable liquidity requirements in terms of liquidity risk upon exiting.

Currently, AmMutual has property REITs in various Asia Pacific countries, including Australia, Singapore, Japan, Thailand, Hong Kong and Malaysia. The REITs are held under the company's wholly managed property fund, AmAsia Pacific REITs.

AmMutual is also looking at REITs in countries which are starting to thrive. Wong said that the upcoming Malaysian IGB REIT is one in which the company is interested in, adding that its exposure to Malaysia's REITs market is about 7% at present. AmMutual would also buy other suitable REITs.

Yong also shared that for Malaysia, AmMutual was keen on retail REITs. It was neutral on office REITs given the over-supply, and was mindful on logistics because of liquidity. He added that the company prefers REITs stocks with a minimum RM 1.5 billion in market capitalisation.

Established on 18 July 2011, AmAsia Pacific REITs has since achieved remarkable total returns of 20.8% to date. The property REITs fund has an annual average dividend yield of about 6% and is the only fund in Malaysia to invest solely in Asia Pacific REITs.

Tags: Commercial real estate, Real estate investment


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