Performance Determinants of Malaysian Real Estate Investment Trusts

Abstract

The aim of this paper is to identify determinants of Malaysian real estate investment trust (REITs). By identifying the correct combination of these determinants, it able to assist the REITs companies to construct their property allocation strategy (PAS). However, studies on REITs’ performance in Malaysia showed few arguments on Malaysian REITs. Despite the evidence on potential for diversification, Malaysian REITs received inadequate response from institutional investors. Meanwhile the development of REITs in United States (US) started in early 1960s and it underwent significant cyclical performance and structure changes. Therefore, understanding of the literature review on the weaknesses and strengths of US REITs industry is essential. Furthermore, the lack of local study on these determinants, it is a research gap which can be explored in Malaysian REITs. The correct combination of determinants component contribute toward superior performance on REITs. Based on these reasons, REITs determinants that trigger the performance of Malaysian REITs warrant special attention and investigation. Through the literature review done on REITs determinants, this study manage to design the property allocation strategy for Malaysian. This beneficial for both REITs firm to construct their own PAS to maximize distribution as well as institutional investor to evaluate REITs investment. All in all, ramification of Malaysian REITs determinants helps to improve Malaysian REITs industry.