Friday, December 4, 2015

Investing in Commercial Property?

Different Types of Retail

  • Landed shop house
  • Landed shop office
  • Strata Retail in shop apartment (ie. Sungei Wang, Subang Parade, Mahkota Parade, malls)
  • Strata Retail in Integrated Development
  • REIT (Retail Estate Investment Trust; property unit shares)

Retail Use Versus Other Types
  •  Landed residential
  • Strata Residential - Condominiums, Apartments
  • Strata Commercial Residence - Service Apartments with operating expenses
  • Strata Commercial - Soho, Sovo, Sofo
  • Strata Office
  • Strata Industrial - flatted factories
  • Industrial Premises - Factory, Warehouses
  • Vacant Land

REIT - Real Estate Investment Trust
What is REIT?
- boleh beli shares dengan minimum amount, dividen akan dibayar kepada kita 2 atau 4 kali setahun
- cara termurah untuk own retail property
- Example : Hektor REIT, Capital Mall Malaysia Trust, IGB REIT, Pavillon REIT

Factors to consider before investing in commercial property :

Upside
  • Higher capital appreciation > 5% - 7%
  • Rental growth > every 2 or 3 years increase of 10%
  • Easier collection of rental
  • No need to furnish
Downside
  • Subject to service charge and A&P Charge
  • Deed of mutual convenant
  • Dependant on strength of management
  • Bigger capital outlay


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