Among the listed companies on the Malaysian Stock Exchange, there is a category called Real Estate Investment Trust (REIT). Due to the fact that it is traded on the stock market, newcomers often mistake REITs as a type of stock, but REITs are actually real estate investments.
REIT is the abbreviation of REAL ESTATE INVESTMENT TRUST, which is different from a listed real estate company in that it does not earn profits by selling properties, but collects investors’ money from the stock market to acquire large commercial properties, such as office buildings, shopping centers, factories, hotels, and so on.
KLCC, MidValley, Sunway Pyramid, etc. are listed REITs.
KLCC is listed on the Malaysian stock exchange under number 5235SS and is priced at RM6.96 per unit as of January 20, MidValley and The Gardens are part of IGBREIT and are priced at RM1.75 per unit as of January 20, Sunway Pyramid is part of SUNREIT and is priced at RM1.75 per unit as of January 20. The price per unit is RM1.58 as of January 20 closing.
Here we will take you to see what are the benefits of a production trust.
1. Bring fixed income
Generally, the weekly interest rate of a Malaysian REIT ranges from 4% to 8% per year. By investing in a maternity trust, you can earn a fixed income every quarter or every six months. Choosing a good performing maternity trust will allow you to reach the money to work for you and create a passive income.
2. Suitable for novice investors
Investment trusts are suitable for people who are interested in investing in the industry. The investment capital of an investment trust is small, as low as RM100 to become a shareholder of an investment trust. Not only that, the investment area of the trust is also different, which can achieve the layout of risk diversification.
3. Proof of income
Sometimes when applying for a loan, income support documents are required and this can be used as part of the income proof. The documents of transactions and shareholdings of the investment in the production trust can be used as income support documents for loan applications, which makes it easier to obtain loans.
4. Less risky
Compared to general industrial investments, the risk of an asset trust is low because it can include shopping malls, hotels, hospitals, office buildings, parking lots, and so on. Shopping malls do not have a high occupancy rate, and office buildings or hotels can still spread the risk.