THE outlook for the property sector is promising, lifted by a buoyant stock market, said Capital Dynamics Sdn Bhd managing director Tan Teng Boo.
He said portfolio funds investing into property stocks on Bursa Malaysia was in line with similar investments in other sectors that had experienced some gains.
“So far, we have not seen a significant amount of funds channelled into property stocks. However, the level of foreign direct investment coming into the country has improved,” he said.
A Singapore-based foreign fund manager said Malaysian properties were beginning to attract more foreign investors because of the Foreign Investment Committee's relaxation of the rulings on the purchases of Malaysian properties as well as the market talk of a possible reduction in real property gains tax by the end of the year.
“That aside, we feel the biggest plus factor is that Malaysian prime properties are fairly undervalued compared with prime properties in other developing countries in the region,” he said.
The foreign fund manager also said the real estate investment trust (REIT) market in Malaysia was getting more “credible” as foreign investors were now able to access critical information in the valuation of special classes of property stocks via analyst reports.
He said in some mature economies like the United States and Australia where the REIT industry had flourished, properties under trusts played a significant role in stabilising property markets.
A broker with TA Securities said the brokerage was seeing good trading volumes in property stocks, including those under REITs.
He said except for AmanahRaya REIT, the REITs listed on Bursa Malaysia had outperformed the market. “There is certainly greater interest in property stocks now than before,” said the broker.
Atrium REIT Managers chief executive officer Wong Sui Ee said the establishment of various classes of Malaysian properties under REITs augured well for the growth of the sector.
“The REIT industry helps to support the property market,” Wong said, adding that there were many local properties that could be placed in a trust. As REIT experts in a special class of properties – industrial properties – we acquire and package them and later inject them into Atrium REIT to provide stable and appropriate yields to shareholders,” she said.
She added that as the manager of the REIT, Atrium REIT Managers was responsible for enhancing the value of the properties under the trust.
Wong said there were many prime properties in the industrial category in Malaysia, especially in the Klang Valley, which had the potential to be placed in a REIT.
“There is good demand for tailor-made warehouses required by multinationals operating in Malaysia,” she said, adding that such properties placed under a REIT played a part in supporting the property sector.
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