AXIS REIT Managers Bhd (ARMB) says its study has shown that the six per cent Goods and Services Tax (GST) will not have any material impact on Malaysian real estate investment trusts (REITs).
“I have always maintained that Malaysian REITs have performed well in the past and will continue to do so moving forward. Most REITs have their income in ringgit and are not subject to the volatility of the currency at the moment.
“The study we did indicated that Malaysian REITs will not be materially affected by GST. In some cases, it could be positive as they can now claim input taxes. I believe that as the property market softens, more deals could be on the table and this mean there may be more acquisitions next year,” said ARMB chief executive officer and executive director Datuk Stewart LaBrooy.
ARMB, the manager of Axis Real Estate Investment Trust (Axis-REIT), will see its assets under management grow to RM2 billion following its proposed acquisition of an industrial facility in Southern Industrial and Logistics Clusters in Johor for RM153.5 million.
LaBrooy said the high-yielding asset would provide Axis-REIT with a stable income stream and contribute positively to its earnings.
On whether real estate is becoming too expensive, LaBrooy said prices had topped out and with the spectre of rising interest rates looming, the yields would rise, too.
“We are now seeing some attractive deals coming to the market again,” he told Property Times.
Meanwhile, LaBrooy believed that asset enhancement was an important part of managing a successful REIT, be it in good or difficult times, as it would help to improve its capital value.
“Some examples are the Sunway Putra Mall (formally Legend Mall), which is undergoing a major refurbishment and repositioning, as well as Capitamalls Malaysia Trust’s East Coast Mall and Sungei Wang shopping centre, and Axis-REIT’s Axis Business Campus,” he said.