Saturday, October 15, 2005


There were numerous reports on Axis REIT, mostly favourable.

I am not comfortable with Axis REITs because I don’t understand property market well enough. The properties held by Axis REITs are mainly office buildings and warehouses (in Petaling Jaya and Shah Alam) which could be sensitive to market trend. Axis REIT’s rental incomes may fluctuate due to changes in the landscape of property market and the continuation of few existing major tenants, i.e. DHL, etc.

Should I want to invest in Axis REIT I will need to read and understand more about property market trends, I need to know their relationship with the major tenants, I will need to know if any of the major tenants is leaving Malaysia for good, etc. Such information is a bit difficult to get.

However, I can sleep well buying a REIT that holds mainly shopping malls. I don’t need to understand property market or know its trend. I just need to shop at the shopping malls to know whether the REIT is doing well and continuing to do so.

We will just need to be patient and wait for the IPO of SunCity, YTL, Landmark and IGP's REITs.