PETALING JAYA: The outlook for Malaysia’s real estate investment trust (REIT) sector remains favourable, supported by stable property income, visible acquisition pipelines and resilient distribution visibility, according to BIMB Research.
The research house said it expects the sector to remain resilient amid steady industrial demand, improving performance at selected retail assets and growth opportunities arising from acquisitions, asset enhancement initiatives (AEI) and portfolio optimisation.
“Distribution per unit (DPU) visibility across our coverage remains firm, supported by high payout ratios, resilient asset performance and stable operating conditions,” BIMB Research said in a note to its clients.
Maintaining its “overweight” stance on the sector, it said it continues to favour REITs with healthy occupancy levels, resilient rental structures, clear payout visibility and prudent balance sheets.
It reiterated “buy” calls on Axis-REIT with a target price (TP) of RM2.37, AME- REIT with a TP of RM1.93, and Al-Salam-REIT, with a higher TP of 66 sen, compared with 55 sen previously.
Industrial-focused REITs remain BIMB Research’s preferred segment, supported by sustained demand from logistics and manufacturing tenants.
Axis-REIT is expected to benefit from its RM350mil acquisition pipeline alongside ongoing development projects at Axis Facility 4 @ Bukit Raja and Pasir Gudang Logistics Warehouse 2.
“The sector outlook remains favourable, supported by stable property income, visible acquisition pipelines and resilient distribution visibility,” BIMB Research said.
As at end-March 2026, Axis-REIT’s portfolio recorded 94% occupancy, a weighted average lease expiry of 4.3 years, 15.3 million sq ft under management and RM5.45bil in total assets under management.
AME-REIT is also well positioned to capitalise on robust industrial demand in Johor, supported by full occupancy, positive rental reversions and growth visibility from its sponsor-backed pipeline.
The trust is in the final stages of acquiring i-Park SAC 34, the last asset under its seven-property acquisition pipeline from sponsor AME Elite.
At the same time, the RM14.5mil divestment of three mature assets at i-Park @ SILC is targeted for completion in the first half of financial year 2026 (1H26).
BIMB Research said the transaction demonstrates active portfolio recycling and provides flexibility to redeploy capital into higher-yielding assets.
For Al-Salam-REIT, its prospects are supported by resilient retail income, stable office occupancy and a lower funding cost base following its sukuk wakalah refinancing.
While DPU may moderate in 2H26 due to AEI works and tenant transitions at Komtar JBCC, the research house expects a stronger earnings uplift from 2027 as rental growth, tenant mix improvements, Rapid Transit System-related footfall and asset recycling initiatives gain traction.
Al-Salam-REIT was the only trust under BIMB Research’s coverage to undergo earnings revisions this quarter, with 2026 and 2027 forecasts raised by 47% and 42% respectively, mainly reflecting lower financing cost assumptions following the refinancing exercise.
