Malaysian real estate investment trusts (REITs) have a long history. The country’s first REIT, Amanah Harta Tanah PNB (KLSE: 4952.KL), was listed in December 1990. Since then, Malaysia’s REIT market has grown significantly and is now home to 18 REITs. Here, let’s look at the three largest of the lot.
The biggest REIT listed in Malaysia is KLCC Stapled Group (KLSE: 5235SS.KL) with a market capitalisation of RM 14.03 billion (around S$4.7 billion). KLCC is actually a stapled security made up of two parts – KLCC Property Holdings Berhad and KLCC REIT.
KLCC Property Holdings Berhad has stakes in Suria KLCC, Mandarin Oriental (in Kuala Lumpur), and Menara Maxis. Meanwhile, KLCC REIT is the famous owner of PETRONAS Twin Towers, Menara 3 PETRONAS and Menara ExxonMobil.
For the financial year ended 31 December 2018, KLCC Stapled Group’s total revenue grew 2.9% year-on-year to RM 1.41 billion due to higher revenue from property investment, hotel operations and management services. Likewise, net profit (excluding fair value adjustments) inched up by 0.9% to RM 726.7 million, and distribution per stapled security rose 2.4% to 37 sen.
At KLCC Stapled Group’s unit price of RM 7.77, it is going at a price-to-book ratio of 1.1 and a distribution yield of 4.8%.
IGB Real Estate Investment Trust (KLSE: 5227.KL) is the second largest REIT in Malaysia. The retail REIT has a market capitalisation of RM 6.23 billion.
IGB REIT owns two properties – Mid Valley Megamall (MVM) and The Gardens Mall (TGM) – and they are both located next to each other. MVM prides itself in bringing a new retail concept to Malaysians in 1999 – the “megamall”. Since then, this retail model has caught on well with many shoppers.
IGB REIT’s gross revenue for the financial year ended 31 December 2018 rose 2.1% to RM 535.7 million on the back of higher rental income. Due to the higher gross revenue and lower property operating expenses, net property income (NPI) also increased by 3.4% to RM 386.3 million. However, distributable income inched down by 0.4% to RM 341.4 million, and distribution per unit (DPU) decreased by 1% to 9.19 sen.
At IGB REIT’s unit price of RM 1.76, it has a price-to-book ratio of 1.5 and a distribution yield of 5.2%.
Sporting a market capitalisation of RM 5.19 billion and taking the third spot is Pavilion Real Estate Investment Trust (KLSE: 5212.KL).
Pavillion REIT has five assets in its portfolio, consisting of four retail malls and an office building. Its properties are centrally located in the heart of Kuala Lumpur’s golden triangle.
For the financial year ended 31 December 2018, Pavillion REIT’s gross revenue climbed 13.3% to RM 555.0 million while its NPI grew 16.1% to RM 374.8 million. Consequently, distributable income grew 6.8% to RM 266.6 million and DPU rose 6.6% to 8.78 sen.
At Pavillion REIT’s unit price of RM 1.71, it has a price-to-book ratio of 1.3 and a distribution yield of 5.1%.
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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.