11 Malaysian REITs that made you money if you invested from their IPOs

Last week, I wrote an article about 15 Singapore REITs that would have made you money if you invested from their IPOs. Out of the 19 S-REITs that have been listed for listed for at least 10 years, 15 of them gave a positive overall return for investors.

In this article, we will look at their counterparts from across the causeway and do a similar study on the performance of Malaysian REITs (M-REITs) that have been listed for at least ten years. In total, there are 11 M-REITs that IPOed in 2007 or earlier.

We will make a similar assumption that Sophia (a fictional character) invests in all of them equally from the day the REIT listed. Since Sophia is a hard-core income investor, she doesn’t want to come out with any money to subscribe to any rights (if any) and is prepared for any share dilution. Let’s also assume that she neglects to sell her nil-paid rights from which she can make a profit from.

Let’s assume that Sophia invested RM1,000 in each of these REITs. For example, if Sophia invested in Al-Aqar Healthcare REIT from its IPO in 2006, her initial investment of RM1,000 would have grown to RM1,570 (+57% in capital gains) by 31 December 2016.

On top of that, she would have collected annual dividends of RM27.20 in 2006, RM73.20 in 2007, RM81.00 in 2008, and so on and so forth. We’ll include dividends in our calculation of overall annualized returns.

And to keep things simple, we will exclude brokerage costs, currency exchange gains/losses and taxes that might be applicable to the foreign investors.

So after investing for more than ten years, here are the top 5 best-performing M-REITs for Sophia (annualized returns are inclusive of dividends):

5. Al-Aqar Healthcare REIT (Annualized return: +9.0%)

 

4. Hektar REIT (Annualized return: +9.4%)

 

3. UOA REIT (Annualized return: +9.6%)

 

2. MRCB-Quill REIT (Annualized return: +10.1%)

 

1. Axis REIT (Annualized return: +13.5%)

In summary, here is Sophia’s overall performance:

*AHP listed as a Listed Property Trust in 1989 before converting into a REIT in 2005.
^Adjusted for 1-for-1 split in 2015

As you can see, the Sophia’s M-REIT portfolio is a sea of green! Out of the 11 M-REITs that have been listed for at least 10 years or more, all of them have given consistent dividends and positive overall returns if you invested from their IPOs.

However, do note that AmanahRaya REIT and AmFirst REIT are sitting on capital losses of 2% and 23% respectively. But when we include dividends, their overall return is still positive.

Only three M-REITs – Hektar REIT (2012), AmFirst REIT (2012), and Amanah Harta Tanah PNB (2016) – issued rights. If Sophia had subscribed to them, the table above will show an even better overall return for these three REITs.

Singaporeans and foreign investors who are not comfortable with forex risk are unlikely to be interested in M-REITs as the ringgit continues to weaken. However, Malaysians are unaffected by this as M-REITs are traded in their home currency. So if you’re a Malaysian, M-REITs do seem to be a viable option to build consistent streams of passive income.

We have good news for new and existing members of Dividend Machines. We recently updated the S-REIT course curriculum for 2017 and added brand-new video lessons and content for M-REITs as well! So if you’re interested in including M-REITs for your dividend portfolio, do watch the new videos we’ve launched on Dividend Machines. As promised, current members enjoy these updates for FREE.

Finally, just a quick reminder: 2017 applications for Dividend Machines is closing this Sunday, 26 Feb 2017, at 23:59 hours. If you’re looking for a way to learn how to invest in dividend stocks and REITs and build multiple streams of passive dividend income, then we urge to check out Dividend Machines before it closes.

Once the deadline has passed, Dividend Machines will only reopen in 2018. So if you miss this round, you’ll have to wait 12 months (or more) before we accept new members again.

Happy investing and we hope to see you on the inside! :)

Rusmin Ang is an equity investor and co-founder of The Fifth Person. His investment articles have been published on The Business Times BTInvest section and Business Insider. He has also been featured multiple times on national radio on 938LIVE for his views and opinions on how to invest successfully in the stock market. Rusmin is on the speaking circuit for CIMB Securities (Malaysia) and has spoken at events in Penang, Sibu and Kuala Lumpur and is the co-author of Value Investing in Growth Companies published by Wiley, Inc. The book can be found in all major book stores worldwide and on Amazon.com, Barnes & Noble and Apple's iBooks. Rusmin was actually a former SIAEC scholar who gave up his scholarship and a cushy career to follow his itch of learning how to be a better investor and ultimately lead a life of financial independence. He believes that anyone, even with a regular job, can achieve more financial peace-of-mind by investing intelligently and safely for the long term.

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