RHB Research is maintaining a “Neutral” Call in the MREIT’s due to the expectation of an interest rate hike in the 2H2 and the expectation that sentiment on MREITs as a yield play should be lackluster.
It said that it remains cognisant of the underlying oversupply situation – a medium-term overhang factor that may lead to soft reversion rates ahead.
The research house said that it also highlights that shopping malls and office buildings will be among the first to be adversely impacted if COVID-19 infections rise again and lockdown measures are re-imposed.
It said that it was cautiously optimistic on the prospects of a recovery in the retail sub-sector, in view of the pick-up in foot traffic and tenant sales post relaxation of movement restrictions.
On RHB’s picks, it said that Axis REIT was its preferred pick for its key positioning in a stable segment that is relatively unaffected by risks arising from the sporadic resurgence of Covid-19 infections.
The research house said that due to the unwavering demand for warehouse space stemming from the e-commerce boom, it is also poised to benefit from the reopening of the economy, as it picks up the pace of expansion.
