INDUSTRIAL REITs – namely those invested in warehouses, logistics centres, factories, data centres and business parks – are expected to be heavily weighted in REIT funds this year.
Pacific Trustees group chairman Tan Sri Datuk Amar Steve Shim Lip Kiong said this at a regional REIT webinar titled “Movers and Shakers in Malaysia, Singapore, Hong Kong and China – What to look out for in 2022?”.
“E-commerce flourished during the pandemic and this benefited the warehouse and logistics players, and more data centres are required as technology becomes even more important during lockdowns amid the race to roll out 5G,” he commented.
It was also noted during the webinar that data centres and cold storage are most-sought-after assets by real estate investors in the Asia Pacific region due to the impact of the COVID-19 pandemic.
“There is a 47% surge in demand for data centres in 2020. This is due to increased activity in cloud storage, video conferencing, online schooling, gaming, social networking and work-from-home platforms,” mentioned CBRE|WTW group managing director Foo Gee Jen.
“Malaysia can capitalise on this increased demand as our data centres have one of the lowest tariffs across Southeast Asia.”
Foo further elucidated that due to certain COVID-19 standard operating procedures, worker’s accommodation is another area of opportunity for investors to invest to provide a clean and modern living environment for employees.
However, demand for student residences have declined aggressively due to the increase of online learning enforced by the pandemic.
Foo went on to share that investors are bullish about the real estate market in Asia Pacific, with 59% indicating in a CBRE survey that they would buy more properties this year.
He said this is the highest level since 2016, with 43% investors expressing their intentions to buy more in 2020 and 39% in 2019.
On the other hand, intention levels of real estate investors to sell remain relatively unchanged at 34% in 2021, 30% in 2020 and 33% in 2019.
Meanwhile, CIMB Investment Bank managing director Faez Jumabhoy believed that with regards to data centres, Malaysia has an advantage over Singapore due to its available landbank.
He mentioned that data centres will gravitate towards locations which are secure, earthquake-free, with dual-grid power and aligned with the big data pipes.
However, he added that he does not foresee much interest to set up a data centre-driven REIT in Malaysia.
“Data centres in Malaysia are underutilised and there is excess capacity. Besides location, we need to a lot of power and we need to tap into large Internet underground cables.
“We also don’t have a dual grid here. It is not just about land, but technology as well,” Jumabhoy added. – Nov 12, 2021
