Travel Reference
In-Depth Information
of YTL hospitality REIT
N.N. Chuweni & S.N.M. Ali
Faculty of Architecture, Planning and Surveying, Universiti Teknologi MARA, Perak, Malaysia
M.N.I. Ismail
Faculty of Hotel and Tourism Management, Universiti Teknologi MARA, Shah Alam, Malaysia
S.H. Ahmad
Faculty of Administrative Science and Policy Studies, Universiti Teknologi MARA, Shah Alam, Malaysia
ABSTRACT: Malaysia currently has 16 Real Estate Investment Trust (M-REITs), of which one is Hos-
pitality REIT. The main focus of this research is ascertain the performance of the Malaysian Hospitality
REITs namely YTL Hospitality REITs or formerly known as Starhill REITs. Ratio analysis of financial
statement will be used in the research to ascertain the profit margin since 2010 to 2013. The outcome of
the research shall be beneficial to the related institutional and potential investors who may consider REITs
as another viable alternative investment available in the market. This paper presents the introductory part
of the research outlining the performance of YTL Hospitality REITs.
Keywords
:
Hospitality REITs, performance analysis, financial ratios
1 INTRODUCTION
2 LITERATURE REVIEW
1.1
Real Estate Investment Trust
Real Estate Investment Trust (REITs) or formerly
known as Property Trust Fund means unit trust
scheme that invests or proposes to invest prima-
rily in income-generating real estate (Securities
Commission, 2005). REITs can be divided into
three types which are Equity REITs, Mortgage
REITs and Hybrid REITs. Before examining the
attributes of the performance of REITs, it is per-
haps useful to highlight the concept of REITs.
The Securities Commission of Malaysia defines
REITs as collective investment vehicles (typically
in the form of trust funds) which pool money
from investors and used this pooled capital to
buy, manage and sell real estate. The fund man-
ager will ensure any investment decision made on
its property portfolio achieves it optimum return
before being distributed to the unit holders.
REITs require a trustee to supervise and monitor
all activities of the fund management to ensure
that it complies with all requirements by Securi-
ties Commission.
2.1
Performance of Malaysian Real Estate
Investment Trusts
There are many previous studies conducted on
the performance analysis on Malaysian REITs.
For instance, previous research indicates that
REITs outperform the stock and property mar-
ket of Malaysia during 2008 Global Financial
crisis (GFC) and post GFC period by using the
Jensen measurement index (Ong, 2011). The
result supports the findings of Yusof and Mohd
Nawawi (2012) by using Sharpe and Treynor
Ratios, Jensen's Capital Asset Pricing Model
(CAPM), Fama-French 3-Factor CAPM as well
as Carhart 4-Factor CAPM. The result indicates
Malaysian REITs outperform the market index
of Kuala Lumpur Composite Index (KLCI).
Hence, by looking at these study, Malaysian
REIT perform well during and post GFC as
compared to other market investment indicating
a viable option of diversification in the invest-
ment portfolio especially during the economic
downturn.
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