REIT Company Targeting Northern Property Investor

July 26, 2009 | By admin In Property Investment Market,property investment opportunities |

(Real estate investment trust) REIT company are now targeting property investor in the northern region, particularly the high net-worth individuals and “men on the street.” Anther words said “Affordable homes making a comeback”.

From OSK Investment Bank Bhd (equity capital markets) director, Gan Kim Khoon; there were over RM354bil in fixed deposits and savings of individuals in the country waiting for REIT companies to tap. REITS companies looking at various opportunities for Property In Malaysia.

On REITs-Investors Outreach Programme, they telling about hope to channel some of these funds into REITs, which are high yielding and low risk in nature. The REIT companies from Kuala Lumpur that took part in the event included Axis REIT Managers Bhd, AmFirst ARA REIT Managers and AmanahRaya-JMF Asset Management.

Outside Kuala Lumpur, REITs have little exposure from large companies, and participation by individual investors is also small. There were not many players and the challenge was how to attract more REIT players and property investors into the Property Investment Market.

Property Investment in REITs presently offered the best yield, ranging from 8.5% to 12% yearly, based on current earnings. In such a challenging climate, there are not that many stocks that can give you such yields. It is better than putting funds in fixed deposits.

As example, reported by Axis REIT Managers chief executive officer Stewart Labrooy; the company regularly implemented asset-enhancement exercises to increase the value of its assets.

Axis REIT injected about RM3.5mil to upgrade one of our office buildings in last year, Wisma Kemajuan, in Petaling Jaya. The valuation for the property increased to RM52mil, compared with the original valuation of RM29mil in 2005. The upgrading, was increase the value of the property.

Axis REIT spent another RM8mil on two of its commercial properties which were originally valued at RM106mil. After upgrading, the valuation increased to over RM140mil. Through such asset-enhancement exercises, Axis REIT create more value-added space, which in turn attracts more tenants, and increases our income from rentals.

There are Property Investment Opportunities in REIT company. More and more developer prefer affordable homes making for home buyer during recession. Developers in Penang are targeting home buyers on a lower budget. New property investor can start a buying investment property with this lower budget property.