I thought as long as the company is not doing illegal business (gambling, beers, alcohol related) it's comply with shariah?

I thought that too, but when i check SC website, i see that hotel company do not comply with shariah, maybe because they sell alcohol, some reits invest in hotel so that's why i asked about the compliance of reits with shariah. I hope those who knows can answer this.

This post has been edited by Molotov Cocktail: Jun 17 2008, 09:42 PM

The first reit to list in KLSE is Stareit, if not mistaken.

REITs are non Shariah compliant. If you take a look at Starbiz under Main Board section, it is very clear.
Shariah law forbids any sort of 'interest' type of payment. I believe rentals are considered 'interest'.
Shariah advocates Mudharabah (profit-sharing), but not profiting from interests.
That is why conventional banks are not Shariah compliant.
Do correct me if I am wrong, as I am not Islam

cherroy, the first REIT was AXREIT, listed in August 2005.
STAREIT was listed in November 2005

Thanks 4 ur info. FYI in Islam, rentals are not considered as interest. In my opinion some reits are considered non shariah compliant if they collect rentals from business that associated with gambling and selling alcoholic drink.

Thank you for pointing that out
Well, there may be other factors as well, because I can see some Islamic REITs which are not shariah compliant as well.
It could also be because of credit facilities of REITs? It might cause REITs to be non-compliant.
Whatever it is, REITs as a whole, have all been declared non-compliant as seen in Starbiz.

I still don't get why STAREIT is being beaten down at the moment. Is there something bad cooking in YTL grou in general? If YTLPower is beaten down probably it was because of the fuel hike and the possible IPP renogotiation but how will that affect STAREIT?

Well, the other possibility is foreign funds existing STAREIT. Very curious cos I hold STAREIT. Suppose to be my chip to meet my this year target. :-(

i pulak cannot understand why ATRIUM reit gets beaten down to RM0.80 cent!!!

This is super low, and i'm so worried if anything wrong fundamentally

i'm waiting for axreit to reach 1.65 ...

Currently, FF are existing the market, so any stocks will face selldown even those strong fundamental one also will suffer.

For Reits stocks, they will face some downgrade or selling because potential higher interest rate hike. If FD rate goes up, then reit price need to go down in order to have higher yield. Reits yield always need have to a few % spread in order to attract investors, if FD rate is 6%, reits yield is also 7%, then it doesn't make sense to own a reit.

Also with potentially higher BLR, those reit under high gearing one might need to pay more interest on their loan, so potential less income distribution.

Property market might face some difficulty ahead as today thestar article. http://biz.thestar.com.my/news/story.asp?f...02&sec=business

This post has been edited by cherroy: Jun 23 2008, 04:11 PM

stareit again high volume today...

axreit at RM1.68 ... time to queue up tmr

my 500th post mark

This post has been edited by ante5k: Jun 26 2008, 05:35 PM

hmmm rare to see REIT with such a high volume. Anything happening in the REIT market, especially with STAREIT?

STAREIT sparked large interest because CapitaLand bought a 61.9% stake in Sungei Wang Plaza. Sungei Wang Plaza is the asset of STAREIT, so they are looking for higher distribution.

This is just my 2 cents of opinion. Might be other reasons though

Sungei Wang Plaza has nothing to do with Stareit. Stareit portfolio properties are Lot 10 (opposite of Sungei Wang ), Starhill and JW Marriot.

Properties counters (including Reits) are on the way down because market anticipated poor property market ahead due to high inflation might eat into consumers pocket and lead to slowdown in property and construction as well as overall economy. Even SPB is selling at below Rm3 now.

Dear lord, I apologise for my mistaken identity
I don't remember the assets of STAREIT because I didn't own it. Hehe.

Well, if prices are beaten down in anticipation of what cherroy said, it is the time to pick up some REIT counters as the core revenue of REITs are not affected by the inflation in the mid-term. Most REITs had/are going to renew their major lease contracts this year. So, that should keep the income of REITs strong for the coming 3-5 years

Yes, if their price is selling at deep discount on their NAV, with high yield then it might be a good time to pick up. Because with inflation looming, future property price will only go higher (if those properties is in good strategic place and not lack of demand one), if or when economy start to be a better situation.

Just my opinion.

This post has been edited by cherroy: Jun 27 2008, 10:29 AM

This is my 2cents of playing REIT. Just my opinion.

There are 2 types of REITs. 1 is where the REIT actually 'sublet' almost entire properties back to the parent company - e.g. AMFirst. The other is where it actuall sublet it to other company - e.g. Axis, Quill. Correct me if I am wrong. I am a little worry if the REIT company actually manage/own those properties where history has told me that it can get vacant when economy comes crashing. So my preference is AMFirst where the last report I read says that almost 80% - 90% of AMFirst properties are leased back to AMBank Group where I don't think AMBank Group will be downsizing when economy crashing down. STAREIT is my second choice (though I bought this first and only own this now) as the properties are cater for high end marketing which should be less subjective to economy - unless all expats moving out.

This is just my 2cents. Please share your thought.

Yes, you are correct. There are two kind of Reits, one is just parent company treat reit as a way to list/dispose their stake in the properties to unlock some value and cash to the parent company and parent company lease back and become a major tenants.

There are pros and cons on these 2 types:

1: Those parent company lease back and major tenant one:
Pros: if parent company financial healthy, then won't be facing any major problem of getting tenants ann income is much depend on parent company.
Cons : The Reit itself is not survived on their own competitive strength and demand for property. So if parent company goes, the reit suffer with it, because it is not depended on free market demand actually.

2: Those genuine reit
Pros : Property itself is competitive in the market and survive and earn on its own merit which is strength of the company.
Cons : Tenants are spread across and not depends on single major tenants (which is a good thing also). But if demand for office and rental place reduce might be suffering loss of income, unlike those parent company is the major tenants one.

For long term, and competitive edge, (2) is preferred. But in difficult period of time, (1) will be seen is more stable/defensive (but risk with parent company).

Just my view.

This post has been edited by cherroy: Jun 27 2008, 11:11 AM

Thanks for the detailed information.

Perhaps that is why AXIS can demand such a good price on KLSE compare to AMFirst and STAREIT. Even Quill is better than those 2 at RM1.06 even though its divident yield is lower.

picked up 18lots of axreit at 1.64