1) What is a REIT?

A Real Estate Investment Trust (REIT) is a fund or a trust that owns and manages income-producing commercial real estate (shopping complexes, hospitals, plantations, industrial properties, hotels and office blocks).

A management company for a REIT is permitted to deduct distribution paid to its shareholders from its corporate taxable income. However, to enjoy this tax-free status, the REIT must have most of its assets and income tied to the real estate and distribute at least 90% of its total income to investors/unit holders annually

2) What are the benefits of investing in listed REITs?

Affordability
-> Investment in REITs cost a fraction of the cost of direct investment in real estate. You can start off with a minimal investment outlay.
Liquidity
-> REITs are more liquid compared to physical properties. Shares of publicly-traded REITs are readily converted to cash as they are traded on the stock exchange.
Stable income stream
-> REITs tend to pay out a steady dividend, which is derived from existing rents paid by tenants who occupy the REIT properties.
Exposure to a large-scale real estate
-> The benefits of the real estate are derived on a pro-rated basis through a REIT.
Professional management
-> REIT properties are managed by professionals who will add value for a higher yield, benefiting investors in the long run.

3) How to invest and where to buy REITs?

Similar to trading in stocks, you will be required to have a Central Depository System (CDS) account and a trading account maintained with a broker. You may buy or sell ETFs through your broker, remisier or via online trading during trading hours.

4) What do I have to pay when buying and selling REITs?

Like buying and selling stocks, investors need to pay brokerage commission, stamp duty and clearing fees.

5) What kind of returns can be expected from REITs?

Income distribution based on the distribution policy stated in the REIT's deed; and/or Capital gains which may arise from appreciation of the REIT's price.

6) Typical Conventional REIT Structure



7) REIT risk factor

Refinancing Risks
The ability for REITs to refinance their existing banking facilities are critical to their survival.
Downside Dividend Yields
>Global recession putting strain across all businesses.As a result,dividend yields will come under tremendous pressure with negative rental reversions as businesses try to cut costs.
>Increase interest cost/spreads will also affect the bottom line.
Valuation Pressure
>Property valutations will also come under stress should negative rent reversion persist.
>As valuation fall ,REIT gearing level will increase and possible breaching debt covenants.
>May require balance sheet recapitalisation.
Dilutive Capital Raising
>Dilutive capital raising may be unavoidable in the event of balance sheet recapitalisation.
>REITs with ready sponsor participation will likely to be the first to come to the market.
Market factors
REITs are also subject to market demand and supply. As such, market fluctuations, confidence in the economy and changes in the interest rates may affect REITs price.
Risk Assiociated with Borrowing
>Significant fluctuations in interest rates may have an adverse impact on the financial performance of REIT and may lower income distribution to unit holders.There is an inverse correlation between the interest rates and the distributable income to unit holders.

Other risk include :
- Vacancies following expiry or termination of leases that reduces the REIT income
- The Manager's ability to provide adequate management and maintenance
- Not Sufficient insurance cover for the real estate in case of fire
- Sudden changes in tax regulations
- Poor collection of rent from tenants on a timely basis or tenants going bankrupt
- Lower rent when leases are renewed
- Poor cost control resulting in higher operating and other expenses without a corresponding increase in revenue
- Unexpected expenses due to changes in statutory laws,regulations or government policies.
- Amendment or revocation of the present tax incentives for REIT
- Competition for tenants from other building which may affect rental levels and occupancy rates.

8) Is dividend from REIT subjected to taxes? Can we claim back the tax?

Dividend from REIT are subjected witholding tax (10%) and is not claim back-able.

9) How to select a good REIT ?



Credit to Cherroy
Latest Dividend Distribution Method
AHP : ??
ALAQAR : Cheque
AMFIRST : E-Dividend
ARREIT : E-Dividend
ATRIUM : E-Dividend
AXREIT : E-Dividend
BSDREIT : Cheque
CMMT : E-Dividend
HEKTAR : E-Dividend
IGBREIT : E-Dividend
PAVREIT : E-Dividend
QCAPITA : E-Dividend
STAREIT : E-Dividend
SUNREIT : E-Dividend
TWRREIT : E-Dividend
UOAREIT : E-Dividend

References

http://www.bursamalaysia.com/market/securi...t-trusts-reits/
http://mreit.reitdata.com/

REIT Presentation Slides from AXIS

http://www.axis-reit.com.my/images/axisrei...resentation.pdf
http://www.axis-reit.com.my/images/axisrei...ment%20Tool.pdf

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This post has been edited by Smurfs: Feb 28 2013, 12:01 PM

nice compilations, informative.

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Added on September 6, 2012, 11:57 amquestion from JamesPond.





hasil stamp and normal stamp all can bought from POS malaysia. Stamping was by hasil!! but before stamping u need to have HASIL stamp.

ref: http://www.laweddie.com/wordpress/faqs-of-...ancy-agreement/


This post has been edited by cwhong: Sep 6 2012, 11:57 AM

diff stuff.... but revenue stamp can b in diff forms.... cud b like normal stamp where u can stick..... or post office can use rubber stamp & ink on ur form....

not sure bout legal agreement, but i tot the purpose of revenue stamp is for gov to collect fee only?
as the more important element in an agreement are the signatures, not the stamp rite?

couldn't add pdf by using file attachment wonder why..

anyway Retail REIT outlook by CIMB (19th July 2012)

This post has been edited by Smurfs: Sep 6 2012, 01:22 PM

Thanks for sharing.

Thumbs up!

Hi,
Regarding the Hektar Right Issue. I just realized can trade directly on the market. The rights is trading at RM0.145 now. This is very close to the difference between current price of RM1.38 & Offer price RM1.23 = RM0.15

Since Hektar share price is following the market on down trend; it would be better to just sale the Right Issue to lock in the profit now? I can buy Hektar shares directly from market if later want to increase my unit holdings.

is above understanding correct? thanks!

Yes, you are correct.
Save the hassle to buy bankdraft and sending the form and waiting.

-TR currently worth Rm0.135, current mothershare price isRm1.39, so need to give little bit discount to the TR buyer.

BUMP for SMURFS

Checking in on RED day for REITS.

This thread should be titled M-REITs....

According to Mega Corporate Services, we can print and submit the HEKTAR Rights Subscription Form from http://www.bursamalaysia.com/market/listed...cements/1054109 instead of waiting for the document via snail mail.

You can use PosLaju to submit the RSF + Banker's Cheque/Draft directly to their 15th Floor office.

This post has been edited by ronnie: Sep 7 2012, 10:11 AM

REIT HEKTAR ... any ideas?

This post has been edited by cscheat: Sep 7 2012, 08:37 AM

What is your question actually ?

Oh...PavREIT is already E-Dividend as well.

updated .. thanks for correcting

yep.... who else not in e-divvy? b-reit will b in e-divvy as well........

i still haven't receive my rights forms through post. how come? what can i do?

It's sent via snail mail on 5 September 2012... give it a few more days. Probably would receive it next week.
Application must reach by 19 Sep 2012, 5pm

IGB reit balloting result out.
http://www.mih.com.my/index.php?page=pr533
http://www.mih.com.my/index.php?page=bs533p