There are close to 18 REITs in Malaysia (at this time of writing). Each of these REITs are different in their own ways from their tenant profile to their geographical region. One way we can group these REITs is by looking at the sector they operate in.
Among these 18 REITs, there are 5 of them with industrial properties exposure. Industrial REITs typically own and lease out industrial facilities, warehouses, factories and distribution centres to tenants. Their tenant-based are usually more concentrated in which the tenants would usually lease the entire facilities as opposed to single lot or floors.
Read More: Understanding the Different Type of REITs
For those who are new to REITs, we will be introducing the 5 REITs in Malaysia with industrial assets in this post.
The first REIT we will be looking at is Al-Salam REIT. They are a diversified REIT with asset operations across Malaysia with assets in the retail, office, and industrial sector. Though their operations is not heavy on the industrial side, they do have some exposure in the industrial sector.
This is one of the few diversified REITs in Malaysia and is perfect for investor who are looking for diversified exposure. Their key tenants include QSR Group of Companies for the operations of KFC and Pizza Hut. For those who are staying down South, you would be familiar with Komtar JBCC which is also owned by them.
However, there are a number of things you should know of before you invest in them:
The next REIT, AmanahRaya REIT is also a diversified REIT with exposure in multiples sectors. They have exposure in sectors such as healthcare, office, retail, hospitality as well as industrial. Similar to Al-Salam REIT, their operations are not heavy on the industrial side which is ideal for investors who are looking for a diversified portfolio.
They are managed by AmanahRaya-Kenedix REIT Manager Sdn. Bhd which is a joint venture between AmanahRaya-REIT Managers (59%) and KDA Capital Malaysia (41%). KDA Capital Malaysia is a subsidiaries of Kenedix Asia which allows them to tap into the expertise of Kenedix Group management. For those who are not familiar with Kenedix Group, they are the largest independent real estate asset management organization in Japan with an asset under management (AUM) of approximately ¥2.4 trillion (as of Dec. 2019).
Here’s a post we think you should read to know more about them:
Atrium REIT is a pure industrial REIT. They owned a total of 6 industrial properties (as at 30 September 2020) in which 5 are located in Selangor and 1 property located in Penang. They are one of the few REITs with strong growth outlook with a number of active and acquisition over the past years.
For investors looking for a REIT with pure industrial exposure into their overall REITs portfolio, Atrium REIT is something you should consider. Before you invest in them, here’s a post we think you should read to know more about Atrium REIT:
Axis REIT is a diversified REIT with portfolio located in the Klang Valley, Johor, Penang, Pahang, Negeri Sembilan and Kedah. Though their portfolio are diversified across multiple sector, majority of their properties are industrial assets. This is as opposed to Al-Salam REIT, AmanahRaya Reit and Sunway REIT which are diversified but light on the industrial asset. Having said that, Axis REIT is nevertheless still a diversified REIT.
Investors looking for diversified REIT with a heavier exposure in industrial REIT may want to consider Axis REIT. Before you make any investment decision, be sure to do a proper due diligence on them.
The fifth REIT we will touch on is Sunway REIT. We are sure they are not new to many of you out there. For those who are new to Sunway REIT, they are one of the largest diversified real estate investment trusts (REITs) in Malaysia with a total of 17 properties as at 30 June 2020.
Their main portfolio are in the retail and hotel sector with a small exposure in the industrial sector when they acquired Sunway REIT Industrial- Shah Alam 1 in August 2017. For investors who are looking to get more exposure in the retail and hotel sector with some slight industrial exposure, you may look into Sunway REIT.
Nevertheless, here’s a post we think might be helpful to learn more about Sunway REIT:
From the above summary, 4 of the REITs are diversified REIT with only Atrium REIT being a pure industrial REIT. Nevertheless, all these 5 REITs will give you exposure to industrial properties. It is then dependent on whether you are looking for a pure industrial REIT or a diversified REIT with industrial exposure play.
We hope this summary give you a view of some of the REITs you can look into for some exposure in industrial assets. If you are keen to get a performance snapshot of all the REITs in Malaysia, we have the tool for you.