I am trying to make some sense of the events of the past 12 months (or has it been over 14 months now) especially when it relates to the Malaysian Real Estate Investment Trust (REIT) (MREITs) sector. Most MREITs are heavily invested in the following asset classes – Malls, Offices and Hotels, with some having a blend of all three.
Unfortunately, the succession of the Movement Control Orders (MCOs) since our first lockdown kickstarted on March 18, 2020, has taken its toll on the performance for the four quarters that followed since.
The series of lockdowns have kept customers away from patronising their portfolios, as was the case of the Mall REITs whose customers were prevented from visiting their favourite weekend destinations while tenants demanded more rebates on rents.
Coupled with the “Work From Home” (WFH) directive, this has brought into question the relevance and need for office space expansion especially coming from the many tenants who were not able to use their offices during the lockdowns now requesting for rent relief or rent reductions.