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DJ RHB Research Says 2015 Brighter for Malaysia REIT Sector -- Market Talk
0932 GMT [Dow Jones] RHB Research is maintaining a "neutral" rating on the REIT sector.
It said that the outlook looks brighter in 2015 as earnings start to normalize after being hit by higher expenses in 2014.
The research house said the REITs could take a breather in 2015 given that the risk of further overnight policy rate (OPR) hikes has been substantially reduced as economic growth weakens .
"We still prefer the retail segment, given its stable annual rental growth of about 5-7% and because we expect the GST to have minimal impact on sector earnings."
The 6% Goods and Services Tax (GST) will be effective April 2015 . "Sunway REIT (5176.KU) is our pick for the sector."
Source: Dow Jones Newswires
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Malaysia - Commercial Properties & REITs
38 posts
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Re: Malaysia - Commercial Properties & REITs
by winston » Mon Dec 29, 2014 8:25 am
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Re: Malaysia - Commercial Properties & REITs
by winston » Thu Jan 01, 2015 7:42 am
M-Reits downgraded on earnings outlook
PETALING JAYA: Kenanga Research has downgraded the Malaysian real estate investment trusts (M-Reits) sector from “neutral” to “underweight” on slowing earnings growth outlook.
Of the six M-Reit counters under its coverage, Kenanga’s top pick is Sunway Reit.
The firm said Sunway Reit’s “thicker” yield spreads offered some valuation buffer in a volatile market.
A sharp increase in yield on 10-year Malaysian Government Securities (MGS), which had recently expanded from 3.9% in November to 4.2% in December, is sapping investors’ appetite for M-Reits.
“The outlook for M-Reits may also be affected by the US Federal Reserve’s potential interest rate hike in the second half of next year (2015),” said the research house in a sector update.
Thus, Kenanga concluded that it might be a volatile bond market in 2015 considering high participation of foreign shareholding in MGS at 47% as of October 2014.
This, the brokerage said, would put M-Reits’ valuations at risk and not to mention the potential yield spread if bond yields continue to expand.
Kenanga’s house view was that the MGS would trade above the 4% yield mark in early 2015 but would normalise to 4.2% level in the first half of the year.
However, it argued that M-Reits’ current yields of 5.8% to 6.2% was decent at this juncture.
Over the past three years, M-Reits’ yields have been trading close to 6% as investors were looking for safe avenues and defensive counters.
“We expect to see some rebound rallies in the first quarter of next year (2015) due to financial year 2014 full-year dividends and repositioning of portfolios.
“But we advise investors to sell M-Reits on strength and bottom fishing towards the end of the second quarter to early third quarter of 2015.
“This is to reposition for a better fourth quarter as the oil crisis and the MGS volatility would have stabilised by then,” the brokerage said.
Kenanga said earning per unit growth for M-Reits under its coverage was generally less bullish in 2015 at between 2.8% to 6.4%, except for Axis Reit.
This less robust outlook is due to many of the M-Reits would not see any major lease expiration and softer rental revision due to rising cost pressure and the introduction of goods and services tax.
“Axis Reit’s predicted earnings growth of 14% in 2015 is mainly supported by Axis Business Campus that is to be tenanted during the year,” it said.
Source: The Star
PETALING JAYA: Kenanga Research has downgraded the Malaysian real estate investment trusts (M-Reits) sector from “neutral” to “underweight” on slowing earnings growth outlook.
Of the six M-Reit counters under its coverage, Kenanga’s top pick is Sunway Reit.
The firm said Sunway Reit’s “thicker” yield spreads offered some valuation buffer in a volatile market.
A sharp increase in yield on 10-year Malaysian Government Securities (MGS), which had recently expanded from 3.9% in November to 4.2% in December, is sapping investors’ appetite for M-Reits.
“The outlook for M-Reits may also be affected by the US Federal Reserve’s potential interest rate hike in the second half of next year (2015),” said the research house in a sector update.
Thus, Kenanga concluded that it might be a volatile bond market in 2015 considering high participation of foreign shareholding in MGS at 47% as of October 2014.
This, the brokerage said, would put M-Reits’ valuations at risk and not to mention the potential yield spread if bond yields continue to expand.
Kenanga’s house view was that the MGS would trade above the 4% yield mark in early 2015 but would normalise to 4.2% level in the first half of the year.
However, it argued that M-Reits’ current yields of 5.8% to 6.2% was decent at this juncture.
Over the past three years, M-Reits’ yields have been trading close to 6% as investors were looking for safe avenues and defensive counters.
“We expect to see some rebound rallies in the first quarter of next year (2015) due to financial year 2014 full-year dividends and repositioning of portfolios.
“But we advise investors to sell M-Reits on strength and bottom fishing towards the end of the second quarter to early third quarter of 2015.
“This is to reposition for a better fourth quarter as the oil crisis and the MGS volatility would have stabilised by then,” the brokerage said.
Kenanga said earning per unit growth for M-Reits under its coverage was generally less bullish in 2015 at between 2.8% to 6.4%, except for Axis Reit.
This less robust outlook is due to many of the M-Reits would not see any major lease expiration and softer rental revision due to rising cost pressure and the introduction of goods and services tax.
“Axis Reit’s predicted earnings growth of 14% in 2015 is mainly supported by Axis Business Campus that is to be tenanted during the year,” it said.
Source: The Star
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Re: Malaysia - Commercial Properties & REITs
by winston » Sun Feb 08, 2015 6:56 am
Office sector
Presenting his paper on office space, Christopher Boyd of CBRE, says as of the end of 2014, total office supply stands at 96.6 million sq ft, excluding those in Putrajaya and Cyberjaya.
It was less than 10 million sq ft in the early 1970s.
“We have more office office space than Singapore, same level as Manila and Bangkok,” he says.
Last year, only 300,000 sq ft of space was absorbed by the market, six times less than in 2013, he points out.
Occupancy, currently at about 80%, is expected to deteriorate this year and beyond. Likewise, rental rates.
The market is seeing a flight to quality and older buildings will struggle, but tenancies tend to be “sticky” as contracts are already signed and it costs to move, he says.
Occupancy is expected to move downwards with 18 million sq ft scheduled to be completed by end of 2017 in Greater KL, he says.
Falling oil price may affect demand as traditionally, oil and gas and banking/finance sectors require large amounts of office space in central/strategic areas in the city.
Oil and gas (O&G) players will be cautious about expanding or relocating in 2015, he says.
Rentals of quality offices are above RM8 per sq ft, with three offices breaking the RM10 mark, namely Menara Petronas, Menara Maxis and Integra Tower at The InterMark.
“Landlords of better quality new buildings have remained steadfast, and for the most part, held rents firm or raised them slightly. But is this situation going to last in 2015 as the over supply situation starts to be felt, and O&G prospects drop out?
Source: The Star
Presenting his paper on office space, Christopher Boyd of CBRE, says as of the end of 2014, total office supply stands at 96.6 million sq ft, excluding those in Putrajaya and Cyberjaya.
It was less than 10 million sq ft in the early 1970s.
“We have more office office space than Singapore, same level as Manila and Bangkok,” he says.
Last year, only 300,000 sq ft of space was absorbed by the market, six times less than in 2013, he points out.
Occupancy, currently at about 80%, is expected to deteriorate this year and beyond. Likewise, rental rates.
The market is seeing a flight to quality and older buildings will struggle, but tenancies tend to be “sticky” as contracts are already signed and it costs to move, he says.
Occupancy is expected to move downwards with 18 million sq ft scheduled to be completed by end of 2017 in Greater KL, he says.
Falling oil price may affect demand as traditionally, oil and gas and banking/finance sectors require large amounts of office space in central/strategic areas in the city.
Oil and gas (O&G) players will be cautious about expanding or relocating in 2015, he says.
Rentals of quality offices are above RM8 per sq ft, with three offices breaking the RM10 mark, namely Menara Petronas, Menara Maxis and Integra Tower at The InterMark.
“Landlords of better quality new buildings have remained steadfast, and for the most part, held rents firm or raised them slightly. But is this situation going to last in 2015 as the over supply situation starts to be felt, and O&G prospects drop out?
Source: The Star
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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Re: Malaysia - Commercial Properties & REITs
by winston » Sun Feb 08, 2015 6:59 am
Retail and hospitality
The retail scene tend to work in tandem with the hospitality sector. Adzman Shah Mohd Ariffin, ExaStrata Solutions chief real estate consultant says the rising number of malls and the increase in integrated developments which combine residential with retail component will further weaken sentiment. The increase in online shopping is another factor.
Adzman says 10 malls are due to enter the market this year, offering 5.25mil sq ft of net lettable area in the Klang Valley, with five million sq ft more in 2016/2017.
Mall owners are doing all sorts of promotions and shows to attract shoppers because when they peg rental to sales, the onus falls on them to make sure their tenants do well. Occupancy from 2009 to the first half of last year was about 85%.
In the hotel sector, there is an over supply of rooms, says James Wong of VPC. He says there are about 200,000 hotel rooms in Malaysia with occupancy of between 60% to 65% compared with 80% to 85% in Singapore and Thailand.
Hotel room rates are the second lowest in Asean after Cambodia when in terms of economic status, Malaysia is in the Top 5.
“Local authorites do not know what the other local authorities are approving,” he says. Based on his research, there is a huge oversupply, with 60,000 rooms in the four to five star category, with the Klang Valley having 21,000 of them.
The hotel and tourism sector attracted a total of 69 projects with approved total investments of RM3.88bil in the first half of 2014. Domestic investments accounted for most at RM3.7bil or 96%.
The number of approved hotel/tourism projects declined by 15.85% in the first half of 2014 compared with the same period a year ago. Capital investments declined by 41.67%.
Source: The Star
The retail scene tend to work in tandem with the hospitality sector. Adzman Shah Mohd Ariffin, ExaStrata Solutions chief real estate consultant says the rising number of malls and the increase in integrated developments which combine residential with retail component will further weaken sentiment. The increase in online shopping is another factor.
Adzman says 10 malls are due to enter the market this year, offering 5.25mil sq ft of net lettable area in the Klang Valley, with five million sq ft more in 2016/2017.
Mall owners are doing all sorts of promotions and shows to attract shoppers because when they peg rental to sales, the onus falls on them to make sure their tenants do well. Occupancy from 2009 to the first half of last year was about 85%.
In the hotel sector, there is an over supply of rooms, says James Wong of VPC. He says there are about 200,000 hotel rooms in Malaysia with occupancy of between 60% to 65% compared with 80% to 85% in Singapore and Thailand.
Hotel room rates are the second lowest in Asean after Cambodia when in terms of economic status, Malaysia is in the Top 5.
“Local authorites do not know what the other local authorities are approving,” he says. Based on his research, there is a huge oversupply, with 60,000 rooms in the four to five star category, with the Klang Valley having 21,000 of them.
The hotel and tourism sector attracted a total of 69 projects with approved total investments of RM3.88bil in the first half of 2014. Domestic investments accounted for most at RM3.7bil or 96%.
The number of approved hotel/tourism projects declined by 15.85% in the first half of 2014 compared with the same period a year ago. Capital investments declined by 41.67%.
Source: The Star
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Re: Malaysia - Commercial Properties & REITs
by winston » Sun Mar 08, 2015 7:08 am
In the office sector, Kuala Lumpur is expected to be the first major city to hit the 100 million-sq-ft mark by the end of this year.
Average prime rents for grade A offices are also expected to stabilise in 2015 as 4.83 million sq ft of office space will be completed this year.
On the other hand, retail malls will be facing heavy competition from new players and increased difficulties in maintaining occupancy rate.
The average rental rate in prime retail malls remained healthy at RM22 per sq ft in 2014, with an average occupancy rate at 85%.
Consumers are expected to be cautious on their purchases after the implementation of GST.
Thus, sales on big items will likely be affected, with overall retail sales expected to be resilient.
“The retail sector will face many challenges due to the large supply of retail space.
Hence, mall owners have to be innovative by bringing new experiences to their mall.
Source: The Star
Average prime rents for grade A offices are also expected to stabilise in 2015 as 4.83 million sq ft of office space will be completed this year.
On the other hand, retail malls will be facing heavy competition from new players and increased difficulties in maintaining occupancy rate.
The average rental rate in prime retail malls remained healthy at RM22 per sq ft in 2014, with an average occupancy rate at 85%.
Consumers are expected to be cautious on their purchases after the implementation of GST.
Thus, sales on big items will likely be affected, with overall retail sales expected to be resilient.
“The retail sector will face many challenges due to the large supply of retail space.
Hence, mall owners have to be innovative by bringing new experiences to their mall.
Source: The Star
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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winston - Billionaire Boss
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Re: Malaysia - Commercial Properties & REITs
by winston » Mon Sep 07, 2015 6:11 am
Forty malls to enter the market in Greater Kuala Lumpur
By: THEAN LEE CHENG
THE Sunway Group expects the retail sector to be “extremely competitive” with 40 malls anticipated to enter the market in Greater Kuala Lumpur next year.
Of this, a dozen of them will have net lettable area (NLA) of about one million sq ft and above, says Sunway Shopping Malls & Theme Parks CEO H. C. Chan, which is part of the larger Sunway group.
As a rule of thumb, malls of this size will have considerable impact on the sector although there is a place for smaller neighbourhood malls.
Chan says two factors will be the underlying thorn in the flesh for Sunway’s retail business – the steep competition entering the market and the “critical” juncture it finds itself in as a result of evolution in the mall business.
“We are at a critical stage of our journey,” says Chan.
“Critical” because the last two years we have seen malls open with just 50% occupancy, he says.
Chan says the mall management sector has become saturated and the group will have to give enhanced customer service and experience, he says.
The group is in the midst of planning and strategising for the next leap forward but he declines to elaborate. It will look at improving its themed concepts.
Chan says because it is an integrated developer, it has planned most projects to leverage on each other and surrounding vicinity.
The group, says Chan, is involved in between seven and eight sub-segments of the property sector. They are in every location, in different parts of the city, Penang, Ipoh and Johor.
Because of its experience in mall operation and management and its network of properties, the group has managed to set itself apart from others. Nonetheless, it will get harder to fill up space despite the team having learned the details of retail operations and management.
It will “become easier” with each new mall, but it will also be tougher because of the overall environment it is operating in, he says.
Source: The Star
By: THEAN LEE CHENG
THE Sunway Group expects the retail sector to be “extremely competitive” with 40 malls anticipated to enter the market in Greater Kuala Lumpur next year.
Of this, a dozen of them will have net lettable area (NLA) of about one million sq ft and above, says Sunway Shopping Malls & Theme Parks CEO H. C. Chan, which is part of the larger Sunway group.
As a rule of thumb, malls of this size will have considerable impact on the sector although there is a place for smaller neighbourhood malls.
Chan says two factors will be the underlying thorn in the flesh for Sunway’s retail business – the steep competition entering the market and the “critical” juncture it finds itself in as a result of evolution in the mall business.
“We are at a critical stage of our journey,” says Chan.
“Critical” because the last two years we have seen malls open with just 50% occupancy, he says.
Chan says the mall management sector has become saturated and the group will have to give enhanced customer service and experience, he says.
The group is in the midst of planning and strategising for the next leap forward but he declines to elaborate. It will look at improving its themed concepts.
Chan says because it is an integrated developer, it has planned most projects to leverage on each other and surrounding vicinity.
The group, says Chan, is involved in between seven and eight sub-segments of the property sector. They are in every location, in different parts of the city, Penang, Ipoh and Johor.
Because of its experience in mall operation and management and its network of properties, the group has managed to set itself apart from others. Nonetheless, it will get harder to fill up space despite the team having learned the details of retail operations and management.
It will “become easier” with each new mall, but it will also be tougher because of the overall environment it is operating in, he says.
Source: The Star
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winston - Billionaire Boss
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Re: Malaysia - Commercial Properties & REITs
by winston » Mon Jan 04, 2016 8:45 am
Grade A office rent under pressure
BY THEAN LEE CHENGandEUGENE MAHALINGAM
Source: The Star
http://www.thestar.com.my/business/busi ... ?style=biz
BY THEAN LEE CHENGandEUGENE MAHALINGAM
Source: The Star
http://www.thestar.com.my/business/busi ... ?style=biz
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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winston - Billionaire Boss
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Re: Malaysia - Commercial Properties & REITs
by winston » Sun Jan 17, 2016 8:04 am
Opportunities in a slow property market
BY THEAN LEE CHENGAND EUGENE MAHALINGAM
Source: The Star
http://www.thestar.com.my/business/busi ... ty-market/
BY THEAN LEE CHENGAND EUGENE MAHALINGAM
The scheduled openings of 10 new shopping malls by 2015/2016 in the Klang Valley is expected to impact occupancy and rent further. Consumers will be more selective in their spending and consumption will trend towards needs more than wants.
Source: The Star
http://www.thestar.com.my/business/busi ... ty-market/
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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winston - Billionaire Boss
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Re: Malaysia - Commercial Properties & REITs
by winston » Mon Feb 01, 2016 7:04 am
Holding out during tough times
BY EUGENE MAHALINGAM
Source: The Star
http://www.thestar.com.my/business/busi ... ugh-times/
BY EUGENE MAHALINGAM
Some 17 million sq ft of shopping space will be introduced into the Klang Valley from this year until 2018.
Winston's Note: Mid-Valley has 1.7m of leasable space. So 17m = 10 Mid-Valleys
Expected incoming retail supply this year are Damansara City Mall, Sunway Velocity Lifestyle Shopping Mall, KL Gateway Retail Podium, MyTOWN Shopping Centre and KL Eco City Retail Podium, Sunway Pyramid Phase 3, Utropolis Marketplace, da:men, AEON Mall Shah Alam, Empire City Mall, The Starling @ Damansara Uptown, EVO Shopping Centre, M Square Shopping Centre, Melawati Mall, Retail @ Pacific Star, GLO Damansara, Selayang Star City, Amerin Mall and Bangi Mall.
Next year will see the introduction of Giant Setapak Mall, Elite Pavilion, Four Season Place Retail Podium, Suria KLCC Extension (Lot 185,167,K), TRX Lifestyle Quarter Mall, EkoCheras, Kiara 163 Lifestyle Mall, Tropicana Gardens Mall, CentralPlaza Mall and The Wharf Puchong.
GM Robertson and Kuala Lumpur International Outlet are expected to make their debut in 2018, and 2019, Pavilion Damansara Heights will be opening its doors.
Growing office space
“Kuala Lumpur will see an additional availability of 100 million sq ft of office space by the end of this year, beating other business hot spots like Singapore, Bangkok and Jakarta.
“Purpose-built office supply is estimated to grow by 5.51% to a historical 99.98 million sq ft in the Klang Valley this year. There will be a fresh supply of 4.83 million sq ft of new office space, as 10 key commercial developments are likely to be completed this year.”
He says most of the projects nearing completion are in Kuala Lumpur City Centre (57%), followed by Metro Kuala Lumpur (38%) and Greater Kuala Lumpur (5%).
Source: The Star
http://www.thestar.com.my/business/busi ... ugh-times/
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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winston - Billionaire Boss
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Re: Malaysia - Commercial Properties & REITs
by winston » Wed Feb 10, 2016 7:48 am
not vested
Upside seen in Reits
BY AFIQ ISA
Source: The Star
http://www.thestar.com.my/business/busi ... -in-reits/
Upside seen in Reits
BY AFIQ ISA
Source: The Star
http://www.thestar.com.my/business/busi ... -in-reits/
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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winston - Billionaire Boss
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