Malaysia Reits on a roll as investors chase yield, but tax clouds loom
Retail and industrial trusts on the Bursa Malaysia such as Sunway Reit and Axis Reit are favoured by analysts for their defensive attributes amid uncertainty
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[KUALA LUMPUR] Malaysian real estate investment trusts (Reits) appear to be making a comeback, beating the broader market as investors chase defensive and yield-generating assets amid expectations of rate cuts.
But the momentum faces a near-term test, with the expanded sales and services tax (SST) kicking in on Jul 1. As the upcoming tax compels landlords to levy an 8 per cent service tax on commercial leases, analysts expect it to drive costs up for tenants and dent Reits’ earnings.
RHB Research analyst Wan Muhammad Ammar Affan observed that the Bursa Malaysia Reit index has modestly outperformed both the FBM KLCI and FBM100 indices since 2022.
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