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DBKL rate hike to impact REITs with high exposure to KL properties, says CIMB Research

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DBKL rate hike to impact REITs with high exposure to KL properties, says CIMB Research Empty DBKL rate hike to impact REITs with high exposure to KL properties, says CIMB Research

Post by Cals Mon 25 Nov 2013, 14:08

DBKL rate hike to impact REITs with high exposure to KL properties, says CIMB Research
Business & Markets 2013
Written by Jonathan Gan of theedgemalaysia.com   
Monday, 25 November 2013 10:25
KUALA LUMPUR (Nov 25): CIMB Research has maintained its Neutral rating on M-REITs and said that although the hike in DBKL assessment rates will have a negative impact on the REITs’ net property income, most of it will be passed on to their tenants.
In a note Monday, the research house said the rate hike would have a bigger impact on the REITs with high exposure to Kuala Lumpur properties.
“We retain our Neutral stance on the REIT sector.
“Apart from the hike in assessment rates, we believe that the risk of higher interest rates in 2014 and thus, the narrowing yield spreads, will dampen the investor appetite for M-REITs.
“For exposure to Malaysian property, we advise investors to buy Mah Sing, which is currently our top pick for the property sector,” it said.
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