Manulife Asset Management Services Bhd (MAMSB) has launched what it claims to be the world’s first Shariah global real estate investment trust (REIT) fund available to retail investors.
The Manulife Shariah Global REIT Fund invests in Shariah-compliant real estate investment opportunities from across the globe, providing Malaysian investors with more diversified sources of mediumto long-term returns.
Apart from the traditional investments into residential, retail, office and industrial REITs, the company said in a statement that its global nature captures potentially higher growth opportunities stemming from “new economy” sectors like e-commerce, self-driving cars, the Internet of Things and other technology-related sectors.
The backbone of all these new technologies and businesses is the demand for infrastructure build-out including data centres, telecommunication cell towers and warehouses in which the fund can invest.
The fund can also have exposure into the healthcare industry such as medical centres and retirement homes, which are areas of growth in the face of the world’s ageing population.
MAMSB CEO Jason Chong (picture) said Asian investors traditionally have a good appetite for property investments due to the potential long-term income and capital appreciation, as well as for inheritance purposes.
“Investing in brick-and-mortar, however, limits them to only a few physical residential or commercial assets typically in one or two jurisdictions, while global REITs can expose them to a wider universe of property investments including large-scale infrastructure projects that are typically off-limits to individual investors,” he said.
In the statement, MAMSB said compared to physical properties, REITs are free of worries about illiquidity.
REITs are also proven to be a more resilient asset class throughout different stages of an economic cycle.
Historically, it said Shariah REITs have also generated higher total return than conventional REITs, partly thanks to the Shariah screening requirements that limit the companies’ debt-to-equity ratio to 33%.
Between September 2013 and the end of December 2018, the IdealRatings Global REITs Islamic Select Malaysia Index — which acts as the fund’s benchmark — recorded a total return of 67%, compared to the S&P Global REIT Index return of 36%.
MAMSB is a wholly owned subsidiary of Manulife Holdings Bhd, the public-listed company which is majority owned by Canada-based Manulife Financial Corp. — TMR