PETALING JAYA: Real estate investment trust (REIT) players will be taking the necessary steps to safeguard business prospects and improve their performances to remain competitive.

Tower-REIT chairman Tang Hong Cheong said the group will continue to improve the performance of its portfolio and actively pursue yield-accretive investment opportunities.

Tang said this is anticipated to strengthen its portfolio further in order to deliver sustainable returns.

“As we look towards the future, we remain cautiously optimistic about the prospects of Tower-REIT.

“While the challenges posed by rising costs, interest rates and geopolitical uncertainties are likely to persist, we are confident that our proactive asset management strategies and commitment to sustainability will continue to drive value for our unitholders,” he said in the company’s annual report.

According to its website, Tower-REIT’s portfolio currently comprises interests in three premium Grade-A office assets, namely, Guoco Tower and Plaza Zurich in Damansara Heights, as well as Menara HLX within the Kuala Lumpur city centre.

Tang noted the Klang Valley office market continued to be affected by an oversupply of space, which has put downward pressure on rental rates and occupancy levels.

“The shift towards hybrid work models, preference for green buildings and evolving workplace strategies has further exacerbated these challenges as companies reassessed office space requirements,” he said.

Meanwhile, KIP-REIT chairman Datuk Dr Syed Hussain Syed Husman said despite the lingering external challenges, headline inflation has been relatively well restrained by government subsidies and price controls.

He said KIP-REIT will focus on strategic tenant management, effective cost control and robust asset enhancement initiatives.

“Our goal is to scale up our operations and grow our total assets under management to RM2bil over the next three years.

“By investing in income-producing real estate in the retail and industrial sectors, KIP-REIT aims to diversify and expand its portfolio, mitigate risks and capitalise on market opportunities,” he said in the group’s annual report.

Moving forward, Syed Hussain said KIP-REIT will actively explore potential yield-accretive acquisitions that align with its investment objectives.

“We believe this approach will effectively mitigate risks, increase returns and support sustainable growth in the long run.”

KIP-REIT’s portfolio comprises income-producing properties in the retail and commercial subsectors.

Meanwhile, YTL Hospitality-REIT said the outlook remains relatively positive for the hospitality industry in the areas where the company’s portfolio is situated, despite wider risks from geopolitical uncertainty and other economic challenges.

“Underscored by the new hotel acquisitions and property development project embarked upon during the financial year under review, the manager is committed to proactively managing its business and taking necessary steps in order to safeguard the long-term prospects and strong ongoing performance of the group,” said YTL Hospitality-REIT in a statement in its annual report.

The group noted global economic growth is anticipated to remain steady, supported by moderating inflation, resilient labour markets and a rebound in global trade.

“However, the global economic outlook remains subject to downside risks, including escalating geopolitical tensions, higher-than-expected inflation and a sharp tightening in financial market conditions.”

YTL Hospitality-REIT, meanwhile, said robust domestic demand will continue to anchor growth.

This is supported by improving labour market conditions and stronger investment activities.

“Improvements to external demand, with increased global trade activities and tourist arrivals, will further bolster Malaysia’s economic growth.”

Additionally, the group said international tourist arrivals into Malaysia are on track to recover to pre-pandemic levels in 2024, spurred by improving flight connectivity and the expansion of visa-free travel policies.

“Higher overall spending and a more diversified tourist base will further support the sector’s recovery.

“Despite shorter-term challenges that may arise, the manager remains confident in the long-term future of the hospitality sector and the positive outlook for the group,” it said.