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The significance and performance analysis of Malaysian real estate investment trusts

Aina Jazima Khairulanuwar (Department of Estate Management, Faculty of Architecture, Planning and Surveying, Universiti Teknologi MARA, Perak Branch, Seri Iskandar Campus, Seri Iskandar, Malaysia)
Nor Nazihah Chuweni (Department of Estate Management, Faculty of Architecture, Planning and Surveying, Universiti Teknologi MARA, Perak Branch, Seri Iskandar Campus, Seri Iskandar, Malaysia)

International Journal of Law and Management

ISSN: 1754-243X

Article publication date: 23 December 2020

Issue publication date: 21 May 2021

455

Abstract

Purpose

This paper aims to examine the significance and performance analysis of the Malaysian Real Estate Investment Trust (M-REIT) from 2014 to 2018.

Design/methodology/approach

Performance analysis is done through operating ratio (current ratio), leverage ratio (debt ratio) and efficiency ratio (return on asset and return on equity).

Findings

M-REIT has been ranked 27th globally and 7th in Asia Pacific REIT market, implying the significance of the market. The trend of market capitalisation of M-REIT had flourished from 2014 to 2017 but declined in 2018. The total assets of M-REIT have been seen thriving over the years with both Islamic REIT market capitalisation and total assets showing improvements throughout the year. From the viewpoint of efficiency ratios of ROA and ROE, Islamic REIT is deemed more favourable to investors than conventional REITs, implying the high receptive of Islamic REITs.

Research limitations/implications

In terms of efficiency of operation, it is evident that several sectors of REITs may be at risk of liquidity due to the decline in current ratio from 2014 to 2018, as current ratio of less than 1 is considered a red flag.

Originality/value

Performance analysis on the performance of each sector as the outcome of the research could ease investors’ decision-making as whether it can be considered as one of the viable investments available in the market.

Keywords

Acknowledgements

The authors are grateful to the referees for their comments.

Citation

Khairulanuwar, A.J. and Chuweni, N.N. (2021), "The significance and performance analysis of Malaysian real estate investment trusts", International Journal of Law and Management, Vol. 63 No. 4, pp. 417-430. https://doi.org/10.1108/IJLMA-01-2020-0022

Publisher

:

Emerald Publishing Limited

Copyright © 2020, Emerald Publishing Limited

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