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Bursa Malaysia Securities Berhad (“Bursa Malaysia” or “The Exchange”) today launched the Real Estate Investment Trust (“REIT”) Index, the Exchange’s 11th in-house calculated index. The REIT Index, which will track all listed REITs on Bursa Malaysia, is aimed at increasing the profile of these REITs and serves as a benchmark to gauge their overall performance.
Bursa Malaysia Chief Executive Officer, Datuk Seri Tajuddin Atan said, “The introduction of the REIT Index is in line with global trends where REITs, which is a steadily rising sector, have become a major asset class for investors, especially those looking for high dividend pay outs. The dividend yields for REITs was 5.0% in September compared to the 3.0% dividend yield of the FBM KLCI. REITs also present a lower risk and hence, adding them to a diversified investment portfolio increases returns and reduces risk. Having a REIT Index will also provide an opportunity to create an Exchange Traded Fund with the REIT Index as the underlying in the future.”
There are currently 18 REITs listed on Bursa Malaysia, including four Shariah-compliant REITs, accounting for 2.4% of the total market capitalisation. As at 30 September 2017, the market capitalisation for REITs stood at RM44 billion compared to just RM5 billion in 2007, representing a compound annual growth rate of 24%.
The REIT Index is a market cap weighted index, with constituents’ weighting capped at 10%, to prevent any single constituent from exerting a disproportionate influence on the Index. Newly listed REITs will be eligible for inclusion into the index three months after their initial public offering date.
The index design is formulated upon consultation with the industry, and is supported by the Malaysian REIT Managers Association.
Malaysian REIT Managers Association's Chairman, Dato' Jeffrey Ng said, "The launch of the Bursa Malaysia REIT Index marks a meaningful milestone for the REITs sector in Malaysia. By enhancing the profile and visibility of REITs in Malaysia, we hope to continue to attract investors across all segments, both institutional investors and retail investors across domestic and international markets. The association is committed to continuously promote
the growth of the industry by attracting more REITs in the country. This will ultimately improve the depth and breadth as well as liquidity of the REITs market in Malaysia for future development of by-products such as Exchange Traded Fund in the future."
REITs listed on Bursa Malaysia as at 30 September 2017:
- Al-'Aqar Healthcare Real Estate Investment Trust
- Al-Salām Real Estate Investment Trust
- Amanah Harta Tanah PNB
- AmanahRaya Real Estate Investment Trust
- AmFIRST Real Estate Investment Trust
- Atrium Real Estate Investment Trust
- Axis Real Estate Investment Trust
- CapitaLand Malaysia Mall Trust
- Hektar Real Estate Investment Trust
- IGB Real Estate Investment Trust
- KIP Real Estate Investment Trust
- KLCC Real Estate Investment Trust
- MRCB-Quill Real Estate Investment Trust
- Pavilion Real Estate Investment Trust
- Sunway Real Estate Investment Trust
- Tower Real Estate Investment Trust
- UOA Real Estate Investment Trust
- YTL Hospitality Real Estate Investment Trust
