IGB REIT strategically positioned to gain from retail recovery

KUALA LUMPUR: IGB Real Estate Investment Trust (IGB REIT) is strategically positioned to benefit from the growth in Malaysia’s economy, supported by its main consumers group - the mass affluent, who usually have better spending power, especially during an economic expansion.

AmInvestment Bank Bhd’s (AmInvestment Bank) investment case for IGB REIT was based on it being a proxy for REITs to retail consumption growth post-pandemic.

“Both the malls owned by IGB REIT, that is, Mid Valley Megamall (MVM) and The Gardens Mall (TGM) are the flagship neighborhood malls in Klang Valley, and we believe they can return stronger in the aftermath of the pandemic as retailers consolidate their physical footprint to focus more on the flagship malls, amidst a shift in their business strategy to online expansion to rationalise costs during the pandemic,” the research firm said.

“We believe IGB REIT is strategically positioned to benefit from the growth in Malaysia’s economy, supported by its main consumers group the mass affluent, who usually have better spending power, especially during an economic expansion.”

AmInvestment Bank also highlighted that IGB REIT is in a position to ride the wave of recovery.

“With the recent news on the encouraging development of Covid-19 vaccines, we believe we are counting down to the end of the pandemic.

“This means that social distancing in the retail shopping malls could finally come to an end, enabling the recovery of footfall at malls, and thus IGB REIT’s performance.”