Commercial & Industrial Property News Update

Malaysia - APREA Ranks Malaysian REITs In Fourth Place


November 2, 2012

The Asia Pacific Real Estate Association (APREA) has ranked Malaysian real estate investment trusts (REITs) fourth in Asia Pacific.




With a total of 16 REITs and combined market capitalisation of RM 25 billion, Malaysian REITs have taken the number four spot in APREA's ranking of REITs in the Asia Pacific.

According to Peter Mitchell, Chief Executive Officer of APREA, the recent years have seen the rise of Malaysian REITs thanks to the introduction of tax laws and the rollback of restrictive legislation. The sector was also boosted by the country's adoption of industry best practices, he added.

"One challenge for Malaysia is liquidity and the size of some of the REITS," said Mitchell, noting that large institutional investors do not favour small and illiquid REITs.

APREA explained that the key to success for any REIT is continued adherence to best practices, which includes investment risks, financial reporting, accounting standards, quality of disclosure and a co-operative working relationship between potential REIT sponsors and regulatory authorities.

“The differences in the long-term performance and stability of different REIT regimes can be linked in part to the underlying regulatory framework,” said Mitchell.

“Tax transparency as to dividend payments, thereby eliminating double taxation at the entity and shareholder levels, thereby promoting higher investment yields,” he explained.

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