REIT as a whole did well in 2012 amid the external and domestic uncertainties. The sector had outperformed the FBM KLCI.
The undercurrent of caution has persisted coming into early 2013. Although outlook for the global economy has brightened, uncertainties stemming from the much delayed GE are now (Jan 2013) the overriding concern, at least the near term.
Until we pass this milestone, investors may well continue to take a defensive approach. This in turn would bode well for REITs. However we may not see a repeat performance in terms of gains in 2013 – given the sharp yield compression in 2012.
The three largest retail REITs – Sunway REIT, Pavilion REIT and CMMT – chalked up returns in excess of 30% including yield from income distributions.
AS a result, these trusts are now (11 Jan 2013) trading at relatively lofty 1.4 to 1.5 times their book values while average net yields have fallen to 4.1% to 4.6%. There is thus, little room for further compression – with yield spread against risk free investments such as one year fixed deposits having narrowed to just about 1.35%.
Fresh acquisition may still drive investor interest but as they are, gains may be limited to rental income growth estimated to be single digit.
M-REITs …
Average Yield = 6.427%
| REIT |
Period
|
DPU (sen)
|
Price (RM)
|
Yield
|
NAV (RM)
|
Assets Type
|
| AmFirst |
2H – Mar12
|
4.83
|
1.050
|
9.200%
|
1.4400
| Office |
| UOA |
1H – Jun12
|
5.53
|
1.380
|
8.014%
|
1.4303
| Office |
| AmanahRaya |
Q2 – Jun12
|
1.80
|
0.920
|
7.826%
|
1.0493
| Retail |
| Tower |
1H – Jun12
|
5.48
|
1.480
|
7.554%
|
1.6651
| Office |
| Hektar |
FY11 – Dec
|
10.50
|
1.480
|
7.095%
|
1.4900
| Retail |
| Al-Hadharah |
1H – Jun12
|
4.50
|
1.900
|
6.579%
|
1.7956
| Diversified |
| Atrium |
Q3 -Sep12
|
2.20
|
1.270
|
6.929%
|
1.1278
| Industrial |
| Quill Capita |
1H – Jun12
|
4.10
|
1.240
|
6.613%
|
1.2965
| Office |
| Al-AQAR Healthcare |
1H – Jun12
|
3.26
|
1.380
|
6.109%
|
1.1000
| Plantation |
| Starhill |
2H – Jun12
|
3.62
|
1.120
|
6.473%
|
1.1460
| Diversified |
| Axis |
Q2 -Sep12
|
4.30
|
3.130
|
5.495%
|
2.1154
| Office |
| Sunway |
Q1 – Sep12
|
2.03
|
1.560
|
5.205%
|
1.0968
| Diversified |
| IGB REIT |
FY12 – IPO
|
6.38
|
1.360
|
4.691%
|
0.9960
| Malls |
| CMMT |
1H – Jun12
|
4.20
|
1.820
|
4.615%
|
1.1481
| Malls |
| Pavilion |
FY12 – IPO
|
5.73
|
1.430
|
4.007%
|
0.9500
| Malls |
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