Abstract
Abstract Investment in REITs has become significant in recent years due to the stability and sustainable performance of the investment. A study on the management perspective is very important but this perspective is very limited. Asset management will derive from the profit optimization of the investment. Therefore, it is important to assess asset management strategies to ensure the sustainable performance of the assets. This paper aims to assess asset management strategies among matured REIT companies in developed countries in comparison with Malaysian REIT companies from the perspective of the managers. This research employed qualitative analyses by using content analysis techniques. A total of 41 REIT companies from the United States (US), Japan, Singapore, Australia and Malaysia were assessed. The analyses focused on the similarities and differences between the strategy framework identified in the literature review and the strategies adopted by global REITs and Malaysian REITs under review. The study will enable all REIT stakeholders to become well-informed on global REIT asset management that will derive the maximum profit from the investment. The success of developed countries’ REITs will provide guidelines for Malaysian REITs to adopt the best practice of strategic asset management from REITs in mature markets. Furthermore, this study is one of few papers that have discussed the issue of strategic property investment, particularly focusing on REITs.
Highlights
Investment in Real estate investment trusts’ (REITs) has become more significant in recent times due to the sustainable performance of investment growth shown by this type of investments
It was shown that the key strategy for REITs is formulated from the real estate lifecycle, which contains activities connected with acquisition or new development, asset management, maintenance, asset enhancement and disposition
The lifecycle of assets should be managed within the organizational level of management, which consists of portfolio management, asset management and property management
Summary
Investment in REITs has become more significant in recent times due to the sustainable performance of investment growth shown by this type of investments. There are more than 500 REITs in over 22 countries globally, with total market capitalization of approximately USD850 billion. The US is the leading REIT market, comprising 55% of the global market share, followed by Australia (10%), France (8%), Japan (6%) and the United Kingdom (UK) (5%). As of August 2012, Asia had 138 REITs across seven countries, with a total market capitalization of over USD118 billion, accounting for over 12% of the global REIT market. In REIT investment portfolios, managers play an active role in REIT operations to ensure that the portfolio attracts investors as well as remaining financially sustainable. Due to the substantial responsibility of the position, managers must possess extensive real estate experience, knowledge and skills which involve all levels of operation, industry updates and strong financial analyses and skills. REIT manager duties include REIT fund management, portfolio management, asset management, and property management (Newell 2012)
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