IGB REIT - The Next REIT Giant In The Making

How many times on average do you visit Mid Valley or The Gardens per month? If you do often visit Mid Valley & think that Mid Valley is hot and always full of crowd, well, now you have the option to enjoy their income directly by subscribing IGB REIT units. Anyway, don't think that Mid Valley will give you any shopping voucher if you hold their REIT units. ^_^

IGB REIT is a retail property REIT, its portfolio comprises of Mid Valley Megamall and The Gardens Mall. With market cap of RM4.25 billion, IGB REIT will become the largest REIT in Malaysia upon listing. Just like other REITs in the market, IGB REIT is a dividend yield player, which will generate 5.15 - 5.5% of dividend per annual if you subscribe their units at IPO price of RM1.25.

Well, I think the IPO price is not impressive, however, reasonable. Let's compare IGB REIT with Pavilion REIT. The IGB REIT IPO is selling at premium in term of book value. IGB price is about 1.25 time of its book value of RM0.996 compare with PAV REIT IPO of 0.936 time. Dividend yield wise, IGB REIT offers lower dividend yield of 5.15 - 5.5% compare with PAV REIT of 6.5% at IPO price.

Anyway, I still see some upsides for IGB REIT price. Well, 5.15 - 5.5% of distribution income is still higher compare to FD rate & current yield of its peers PAV REIT & CMMT which generating around 4.7% & 4.9% of  dividend respectively. On the other hand, P/BV (price per book value) of IGB REIT is around 1.25x which is lower compare with PAV REIT & CMMT around 1.41x & 1.42x respectively.

All in all, I see IGB REIT trades at target price range of 1.40 -1.45 in the short term after listing. It's still worth to be subscribed to have some capital gain as well as dividend payments. For REIT, I prefer AmFirst, Atrium, & Tower REIT, which generating 8.3%, 6.9% & 7.5% yield respectively.



Note: The above content is just a blogging activity that purely share my investment thoughts & ideas and should not be used as recommendation to buy or sell any securities. I may already have position in the above securities. Any action that you take from the opinions or information of this blog is solely on your own responsibility. Please consult your investment advisor before you make any investment decision.