Malaysian Real Estate Investment Trusts (MREITs) are companies that own or finance income generating real estate across a range of property segments. With the beginning of 2022, it’s time to put money on investment with a good ROI.

The pandemic has evolved the way businesses and markets run and that’s true for MREITs as well. Previously, MREITs with bulk of assets in retail properties have done quite well. However, in the new normal, those MREITs were most at risk as many retail shops were temporarily closed or permanently shut down due to lockdown. On the other hand, MREITs involved in industrial properties did considerably well compared to their pre-pandemic performance.

As such, it is interesting to look at which MREITs should one look out for in 2022 in the new normal.

Here is a list of 5 promising MREITs to look out for in 2022:

1. Sunway REIT

Sunway REIT is known as SUNREIT in short. It is one of the most popular MREITs with a market capitalization of RM 4.795 billion. Their portfolio of properties include 74% retail, 14% hospitality, 6% corporate office, and 6% education and industrial sector.

Some of their notable properties include:

• • Sunway Pyramid Mall
  • Sunway Medical Centre
  • Sunway Putra Mall
  • Sunway University.

Though retail and office sectors suffered the most in the pandemic, Sunway Group’s retail and office properties have a healthy occupancy rate. But it is yet to see whether less foot traffic will have an eventual impact in their retail occupancy. Apart from that, their 14% hospitality properties are facing challenges as the lockdowns and border restrictions have declined the tourism and hospitality industry substantially.

The power of this MREIT lies in their extensively diversified portfolio. Where one sector is not doing well, the other can make up for it as they have a wide range of properties under their belt.

For more details on Sunway REIT, investors can evaluate their website and portfolio:
Sunway REIT Website
Sunway REIT Portfolio

With an annualised earnings per share (EPS) at 4.00 and price per earnings (P/E) at 31.42, Sunway MREIT is one to watch out for.

2. Pavilion REIT

Pavilion REIT or PAVREIT in short owns properties in the most bankable sectors in Malaysia, which are retail and corporate office sectors. Currently, 98% of their properties are in the retail sector while 2% delve in offices.

They have only 5 properties in their portfolio but they are some of the most renowned landmarks in Klang Valley:

• • Pavilion Mall
  • Pavillion Tower
  • Intermark Mall
  • Da Men Mall
  • Elite Pavilion Mall

So far, the retail sector of Pavilion properties has an 80% occupancy rate with only Da Men Mall lagging behind at 68.9%. This shows the confidence and trust that investors have in Pavilion, which is also reflected in their market capitalisation at RM 4.206 billion.

For more details on Pavilion REIT, investors can evaluate their website and portfolio:
Pavilion REIT Websites
Pavilion REIT Portfolio

With annualised earnings per share (EPS) at 3.13 and price per earnings (P/E) at 39.89, this MREIT holds great promise for investors in 2022. However, it must be considered that this MREIT is heavily focused on the retail sector with only 2% diversification in office properties. So, only those confident to put all their eggs in one basket should go for this MREIT.

 3. Axis REIT

AXREIT, short for Axis REIT, is another popular MREIT that survived and even soared in the pandmeic. With RM 2.833 billion market capitalisation, it is the third most popular MREIT in the list.

Similar to Sunway REIT, Axis REIT is well diversified with properties in various industries in Malaysia peninsular. Their property assets comprise corporate offices, logistics warehousing, manufacturing and retail.

Some of their prominent properties include:

• • Menara Axis
  • Axis Business Park
  • Bukit Raja Distribution Centre
  • Tesco Bukit Indah

They pose great potential in 2022 because their diversified portfolio has the capacity to mitigate the effects of the pandemic. For instance, if their retail sectors’ occupancy rate decreases due to lockdowns, their warehouse’s demands will increase because more people will deliver by online means to sustain their business, which would require spacious warehouses to store their products.

Over the years, they have had a consistent dividend yield of 5% with current annualised earnings per share (EPS) at 8.19 and price per earnings (P/E) at 23.69. Thus, they can be trusted to be an MREIT to invest in 2022.

For more details on Axis REIT, investors can evaluate their website and portfolio:
Axis REIT Websites
Axis REIT Portfolio

4. Sentral REIT

Sentral REIT or SENTRAL in short is the fourth most promising MREITs to look out for in 2022. With a market capitalisation of RM 959 million, majority of their properties include office buildings followed by retail assets and car parks.

Some of their most successful properties include:

• • Platinum Sentral
  • Menara Shell
  • Plaza Mont Kiara (partial)
  • TESCO Building in Jelutong

Overall, they are successfully managing more than 2.1 million square feet of lettable areas. They also do not seem to be drastically impacted by the pandemic as their occupancy rate maintained at 93% in the worst of the pandemic in December 2020.

Currently, they have good annualised earnings per share (EPS) of 8.15 and price per earning (P/E) of 11.11. Besides, their healthy office tenancy rate is a reflection of their stability and hence a potential MREIT for investors to consider for 2022.

For more details on Axis REIT, investors can evaluate their website and portfolio:
Sentral REIT Websites
Sentral REIT Portfolio

5. UOA REIT

The final MREIT to make the list is UOA REIT, which is also known as UOAREIT. With a market capitalisation of RM 770 million, they are heavily invested in office properties.

They have 6 properties in their portfolio, all of them comprising corporate offices. All of their notable properties are also in office sector:

• • UOA Corporate Tower
  • UOA Centre Parcels
  • UOA Damansara II

As of December 2019, UOA REIT had an occupancy rate of 90%. This has surely dropped since the beginning of the pandemic. However, their recent acquisition of the UOA Corporate Tower in quarter two of 2021 shows that they are still doing well with a decent occupancy rate in the present.

They foresee an increase in their gross rental income in 2022, especially with the fresh set of positive sentiments, as Malaysia is slowly opening up after a very restrictive 2020 and 2021.

Currently, they have an annualised earnings per share (EPS) of 9.33 and price per earning (P/E) of 12.32, showing their prospective value for 2022 investors.

For more details on UOA REIT, investors can evaluate their website and portfolio:
UOA REIT Websites
UOA REIT Portfolio

REIT is more dependable than stocks when it comes to investment. With the new normal turning around the market and creating new demands for certain properties, investors can watch out for these top five MREITs for portfolio diversification.