Reit sector set for strong second half
Maybank Investment Bank Bhd (Maybank IB) said key catalysts include Sunway Reit's RM613 million divestment of a tertiary property and Axis Reit's RM24 million sale of The Annex — a warehouse with office space.
It also pointed to Pavilion Reit's RM480 million hospitality acquisition and Axis Reit's purchase of six new properties.
The firm said asset enhancement by Sunway Reit and IGB Reit will support income growth, while KLCCP and Sunway Reit are expected to benefit from a post-Ramadan boost in hospitality.
"We also see strategic catalysts among them Reits, including CapitaLand Malaysia Trust (CLMT)'s industrial diversification into logistics to make up 7.9 per cent of assets under management by financial year 2026 (FY26) and Sentral Reit's ongoing pivot away from pureplay office exposure.
"Al-Salam is progressing on its "DISRUPT27" repositioning strategy, with asset recycling and Komtar JBCC's on-going reconfiguration expected to support medium-term yield and valuation recovery.
"Pavilion Reit and CLMT's planned placements and new assets also offer medium-term upside to earnings and distribution per unit growth," the firm said.
With Bank Negara Malaysia expected to consider an Overnight Policy Rate (OPR) cut in 2H25, Maybank IB said the trusts with higher floating-rate debt, currently around 47 per cent of sector average, stand to benefit from reduced financing costs.
The firm said this supports valuation upside and lowers financing costs for growth-oriented Reits.
"Nonetheless, most Reits continue to guide for stable dividends, and with gearing levels largely within comfortable thresholds. There remains room for selective growth via yield-accretive acquisitions," it added.
Maybank IB said the Reits' management maintained a cautiously optimistic outlook, flagging several macro uncertainties.
These include potential implementation of an 8.0 per cent service tax on rental, which would add costs for tenants while limiting Reits' ability to raise rents, as well as potential increase to electricity tariffs and broader economic uncertainties, such as fuel subsidies and tariff wars.
The firm maintained its "positive" stance on the the sector, underpinned by resilient fundamentals, attractive yields and visible catalysts for income growth in 2H25.
It noted that as the Reits appear to head towards further asset diversification, quality of assets in its portfolio would be crucial.
Sunway Reit remains Maybank IB's top pick with a target price of RM2.13. Other "Buy" calls include Pavilion Reit and Axis Reit, with target prices of RM1.83 and RM2.01, respectively, backed by income resilience and asset defensiveness
High-yield plays include YTL Hospitality Reit at RM1.18, Sentral Reit at 88 sen and Capitaland Malaysia Trust at 76 sen.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Sun
9 hours ago
- The Sun
Sarawak aligns tourism development with RMK13 investment zones
KUCHING: The Sarawak government has expressed readiness to align its tourism development strategies with the newly announced tourism investment zones under the 13th Malaysia Plan (RMK13). Datuk Seri Abdul Karim Rahman Hamzah, Sarawak's Minister of Tourism, Creative Industry, and Performing Arts, stated that while the state already possesses strong tourism offerings, further collaboration with federal initiatives will enhance mutual benefits. 'If the tourism investment zones include areas like Mulu, Niah, the Kuching Delta, and the Rainforest World Music Festival, then we are already aligned. We just need deeper discussions,' he said. He emphasised the importance of avoiding overlaps and instead strengthening ongoing and future efforts. Sarawak's tourism sector has shown promising growth this year, with visitor numbers nearing five million and revenue surpassing RM1 billion. Abdul Karim, who also oversees youth and entrepreneurial development, stressed that socioeconomic programs for bumiputera must align with Sarawak's existing ecosystem to ensure effective implementation. He welcomed RMK13's focus on expanding business opportunities through funding, training, and mentorship, noting that the state government has similar initiatives under the Post-COVID-19 Development Strategy (PCDS) 2030. Speaking at the Youth EdXchange Programme 2025, he highlighted the importance of youth empowerment. 'Your experiences—from community immersion to sustainability workshops—prove that when given a platform, young people lead with purpose,' he said. The two-day event, attended by 60 participants, fostered cross-cultural collaboration among local and ASEAN youth. - Bernama
Borneo Post
21 hours ago
- Borneo Post
Fazzrudin: Students must take lead in shaping Sarawak's future
Fazzrudin (front row, sixth right) in a group photo with distinguished guests and attendees of the Sarawak Government Education Initiative Briefing at Curtin University Malaysia. MIRI (Aug 3): Students must step up and take centre stage in shaping Sarawak's future, said Dato Fazzrudin Abdul Rahman during a major education briefing held at Curtin University Malaysia here on Friday. Delivering the keynote speech at the Sarawak Government Education Initiative Briefing, Fazzrudin, who is also the Chief Political Secretary to the Premier of Sarawak, stressed that students are not merely beneficiaries of government support, but key players in the state's long-term transformation. 'Failing to plan is planning to fail. Just as the government has a long-term strategy for Sarawak through PCDS 2030, you too must have a strategy for your life – your studies, your career, your contribution. You are the future of this state,' said Fazzrudin. He explained that the Post-Covid Development Strategy (PCDS) 2030, which serves as a blueprint for economic growth, environmental protection and social inclusion, was created with the younger generation in mind. 'PCDS 2030 was created for you, the young leaders, so that you can reach greater heights in the future,' said Fazzruddin, who is also the Tupong assemblyman. He highlighted Sarawak's plans to attract investors, build new industrial sectors, and lead in green and hydrogen-based economies would only succeed if the state had the local talent to fill the jobs being created. 'We need you to step up. If we can achieve this, Sarawak's future for the next 50 to 100 years will be secure,' he stressed. He likened the government's role to that of a hardworking parent striving to secure a better future for their children and called for the students to honour these sacrifices by excelling in their studies and contributing meaningfully to their communities and state. The briefing formed part of a statewide outreach initiative, bringing together senior political secretaries, state agencies and over 400 students ranging from foundation to diploma level. Curtin University Malaysia Pro Vice-Chancellor, President and Chief Executive Prof Vincent Lee welcomed the delegation and expressed pride in supporting the government's transformative goals. 'As a Sarawak Government-owned university, Curtin Malaysia is proud to support these transformative goals. 'We believe in the power of education, research and community engagement to help build a smarter, more inclusive Sarawak,' said Lee. The event also featured presentations from key agencies, including the Economic Planning Unit, the Ministry of Education, Innovation and Talent Development, Yayasan Sarawak, Sarawak Centre of Performance Excellence (SCOPE), Housing Development Corporation, and Sarawak Information Systems Sdn Bhd (SAINS). Students were introduced to various support initiatives and schemes, including Bantuan Khas Kerajaan (BKK); financial assistance through Yayasan Sarawak; Sarawak Rental Assistance Scheme for student tenants; and upskilling and graduate training under GETS and GAPS programmes. Fazzrudin concluded by stressing the importance of awareness and encouraged students to make full use of available opportunities. 'I hope all of you will take something from today and use it to drive the future of our state,' he said. education fazzrudin abdul rahman leaders students
The Sun
a day ago
- The Sun
New Kuching airport access road to ease traffic by September
KUCHING: The construction of an eight-kilometer access road connecting Jalan Datuk Mohamad Musa in Kota Samarahan to the southern access road of the airport is expected to be fully completed this September. Works Minister, Datuk Seri Alexander Nanta Linggi, said the road, which is categorised as a federal road, will serve as an alternative route to alleviate the frequent traffic congestion between Kota Samarahan and Kuching. 'The current progress is at 96 percent, with only four percent remaining, which involves the installation of road equipment and lights. I understand the entire project can be completed next month,' he told reporters after an official working visit to the project site today. He also stated that the development agenda for the 13th Malaysia Plan under his ministry in Sarawak will be aligned with the state's Post-Covid-19 Development Strategy 2030 (PCDS 2030). He said infrastructure development like roads, education, health, and industries are among the priorities under this plan, in line with the Sarawak State Government's commitment to drive the green energy and sustainable technology sectors. 'The 13th Malaysia Plan document clearly states that Sarawak and Sabah will become energy industry hubs. Therefore, the implementation of infrastructure projects like this is crucial,' he said. Commenting on his ministry's role, Nanta said the Ministry of Works (KKR), through the Public Works Department (JKR), plays a significant role as the primary implementer of national infrastructure development. 'Besides building roads, JKR also assists other ministries like the Ministry of Education and the Ministry of Health in building and repairing schools, colleges, hospitals, and clinics,' he added. - Bernama
