junior's toks

REIT

Naim Cendera Holdings Bhd is considering setting up a real estate investment trust (REIT) for its commercial properties in Sarawak, its managing director and chief executive officer Datuk Hasmi Hasnan says. Although plans are still preliminary, the company is looking at possible yields of between 8% and 12%, and will start to identify which property to develop for REIT by next year. "We've got some plans. We are looking into property investment with recurring income. We may do REIT in the future for our commercial properties that are in prime locations such as major towns like Kuching or Bintulu," He added that a higher yield of 12% would only materialise if the company develops its commercial properties from scratch and has good tenants.

The 2005 budget did what it was supposed to do to the REIT market - getting every developer excited and wanting to launch their own REIT. YTL was the first one to respond and rightly so because they are one of the few developers who have got GENUINE properties that are REIT-ABLE material.

But I want to laugh at this NAIM- hahaahahahahahahahahahahahahhahahahaahhaahah

I don't know what they are thinking. If the directors are interested in attracting instituitional investors, they can FORGET it. I cannot imagine FM especially the foreign ones would go all the way to BINTULU for property visits. In the first place, WHAT PROPERTY MARKET is there in SARAWAK? I am not discriminating the market in Sarawak. I am talking about reality. The property market in KL ie. THE BIGGEST city in Malaysia, is already shallow. What do you think about BINTULU?

Moreover, the yield, according to the dreamer will only be 12% if it is a development project. IF YOU DO A DEVELOPMENT PROJECT IN BINTULU AND GET ONLY 12%, you can DIE STANDING.

I am very concerned with the REIT market of Malaysia. Because if the developers screw it up this time, we will have no chance of developing a very very important market and new instrument. Singapore is benefiting GREATLY from the success of CMT and Acendas.

The problem I see in Malaysia is that, fundamentally, the 2 countries are very different. Singapore has very very low deposit rate (less than 1%) and those rich singaporean have NO WAY to invest.

Malaysia is very different - we have football betting la, magnum, toto, genting highland, Tai Yee Long etc. Ok, seriously, basically, Malaysian are more risk takers and they will do SOMETHING.

So, lets get technical and show my knowledge in English, I am afraid that the REIT market in Malaysia will be Supply-Led rather than Demand-Led. That means to say, REIT is a good news to developers because it is a golden opportunity for them to FLOCK the assets to the market and thinking that some water fish investors will buy up the units. So every tom dick harry and NAIM would want to put their assets to REIT. BUT Those assets that they flock are not REIT material and retail investors are not interested in. Singapore had a Demand-Led market for REIT. Investors wanted a new type of investment instrument. They were sophisticated enough.

I am keeping my fingers crossed (as if I have got somethign to do with this)

Junior

posted by Junior @ 10:50 AM