MONEY MASTER

Malaysia’s real estate investment trust (REIT) sector may  avoid a tax shock , with  Kenanga Investment Bank  expecting the  10% withholding tax on REIT dividends to be fully renewed , despite the concession expiring at end-2025. Why Renewal Looks Likely Kenanga believes the government has  little incentive to change the current structure , given the limited fiscal benefit. Annual REIT net earnings:  ~ RM2.8bn Contribution to  2026 estimated tax revenue:   <0.2% Any policy shift would offer  immaterial fiscal upside , but  meaningful downside  to the sector Key point:   The cost to REIT valuations outweighs the tax gain to the government. What’s at Stake for Investors The concessionary  10% withholding tax , in place since 2016 and renewed annually, has been a key pillar supporting REIT yields. Investors already face an  additional 2% dividend tax  on income above  RM100,000 Effective dividend tax for lar...

Key Takeaways Singapore’s REIT sector is regaining momentum, supported by falling interest rates, steady rental growth, and renewed fundraising activity. According to DBS Group Research, valuations remain attractive with S-REITs trading at 0.9x price-to-book and offering an FY26 yield of 5.8%, a 4% spread over 10-year Singapore government bond yields. Rising share prices and improved financing conditions have reopened the window for acquisitions, with $3.4 billion raised in equity and nearly $2 billion worth of deals announced year-to-date. Underlying rental growth across retail, office, and industrial assets further underpins stability, while hospitality faces near-term headwinds. Quick Glance: Sector Highlights Valuation & Yield S-REITs trading at  0.9x P/B , below historical average. Forecast  FY26 yield of 5.8% , ~4% spread over 10-year SGS yields. Fundraising & Acquisitions $3.4b equity raised  via placements/IPOs in 2025. $2.0b acquisitions  announced Y...

Pavilion Real Estate Investment Trust (PAVREIT) and KLCC Stapled Group (KLCC) continue to dominate the luxury shopping scene in Kuala Lumpur , despite the much-anticipated opening of The Exchange TRX Mall , according to Kenanga Investment Bank . In a recent report, Kenanga revealed that both footfall and sales at TRX Mall have dropped since its initial opening. Many retailers are struggling, with most failing to generate monthly sales above RM1 million. The report suggests that high-net-worth individuals in the Klang Valley still prefer shopping at Pavilion KL and Suria KLCC , largely drawn by their central locations and iconic status, such as the Petronas Twin Towers . While TRX Mall made a big debut in November 2023 with over 400 stores, including flagship brands like Tiffany & Co and Nike , as well as Malaysia’s first Apple Store , the hype appears to be fading. A Kenanga survey found that only 13% of 25 retailers reported a rise in shoppers compared to the start of 202...

Singapore’s sluggish initial public offering (IPO) market is looking for a much-needed revival, with real estate investment trusts (REITs) expected to lead the charge in 2025. One potential standout is Nippon Telegraph & Telephone Corp (NTT) , which is considering a data-center REIT listing that could be worth as much as US$1 billion . This would be a major boost to the Singapore Exchange (SGX) , which is on track for its worst IPO year in over 25 years, with just one IPO recorded so far in 2024. The REIT sector has shown signs of recovery, with Singapore-based real estate trusts rising 14% during the third quarter of 2024. A global decline in interest rates has made the sector more attractive to investors by lowering borrowing costs and boosting dividend yields. This trend is expected to fuel more fundraising and investor interest in REITs, potentially creating a virtuous cycle for new listings. “We are constructive on the equity capital markets in Singapore for the fourth...