Asset Recycling, Acquisitions To Drive Malaysia's REIT Sector In 2H 2025 -- Maybank Investment

KUALA LUMPUR, June 10 (Bernama) -- Maybank Investment Bank Bhd expects catalysts, such as asset recycling and new acquisitions, to support the Real Estate Investment Trust (REIT) sector in the second half of 2025 (2H 2025), as management across the sector maintains a cautiously optimistic outlook.

However, the investment bank flagged several macroeconomic uncertainties, such as the potential implementation of an 8.0 per cent service tax on rental, which could add costs for tenants and limit REITs’ ability to raise rents, as well as a possible increase in electricity tariffs and broader economic concerns like fuel subsidies and tariff wars.

“Active asset enhancement initiatives by Sunway REIT and IGB REIT should further support income growth, while the hospitality segment for KLCC Property Holdings (KLCCP) and Sunway REIT may see a seasonal rebound post-Ramadan.

“We also see strategic catalysts among the REITs, including CapitaLand Malaysia Trust’s (CLMT) industrial diversification and Sentral REIT’s ongoing pivot away from pure-play office exposure,” it said in a research note today.

Therefore, Maybank Investment Bank retained a “positive” view on the REIT sector, underpinned by resilient fundamentals, attractive yields, and visible catalysts for income growth in 2H 2025.

As the REITs appear to head towards further asset diversification, the quality of assets in their portfolio would be crucial, it added.

Meanwhile, the investment bank said that Malaysia’s REITs posted broadly in-line first-quarter 2025 results, with Axis REIT, Sunway REIT, CLMT, and Pavilion REIT recording strong year-on-year earnings growth.

The performance was driven by positive rental reversions, higher occupancy rates, and contributions from new assets.

It said that IGB REIT and KLCCP posted steady results, while hospitality REITs saw some seasonal softness due to Ramadan, although repatriation headwinds led to near-term distribution per unit adjustments in YTL REIT.

“Operationally, the retail and industrial segments remained resilient, while office stayed challenging, though largely defended by long leases and stable occupancy,” it added.

-- BERNAMA