The REITs can be used to achieve a broad range of objectives and goals within the real estate sector. This is because REIT not only allows focusing on different sectors of real estate and also targeting different geographical areas. REIT is one of the investment can help in improving economy and can enhance the economic activity level. Besides that, REIT can contribute to favourable conditions for well-managed companies to go for public because of the low long-term interest rates, constrained supply in many property sectors, decent valuations and low vacancy (‘Evaluating The Future,’2015). Moreover, high amount of income REIT associated with high dividend yields. Therefore, REIT can grow earnings or the net asset value (NAV) faster compared with other investment opportunities (‘Leading REIT Fund,’2015).
REITs performances are depending on economic, REITs may face economic slowdown issue. Therefore, M-REIT can promote a plan or program with high-yield bond funds and higher dividend paying stocks to attract investor to invest REITs investment. REITs consider is a dividend-paying stock that emphasizes on real estate and which is evaluated much more if compare with other stocks (David, 2015). Thus, high return can help to solve the issue of economic slowdown because can attract many investor invest the REITs.
Next, the second issue of REITs is GTS. The company of REITs can held the campaign or program to introduce the complex and high technology financial tools in REITs market to gain extra attention of public for REITs. This can alert more people know about the REITs and increase their interest to contribute fund to REITs market in Malaysia. Besides, it can help to increase the demand on REITs in market and share also will increase if many people invest it.
However, to solve issue of competition situation, REIT Company consolidation with the company which has more capability and equity, that can help the company to prevent some issue and problem from happening. However, Consolidation of REIT Company able to create certain benefits, such as higher magnification compares with the competitor and also the lower capital cost. Consolidation of REIT Company also can provide a good perception to investor which has to let them feel that consolidate of REIT Company able to receive their desirable dividend. Therefore, it can help the company to face the risk of competitive and change the competitive situation. Furthermore, consolidate of REIT company also can improved the property performance. When the performance of the property is very well then it can help REIT to achieve better balance against other companies competing for acquisitions.
4.2 Discussion and Recommendation SPAC
The SPAC is relatively new in Asia. Malaysia is generally one of the markets available with proper and appropriate SPAC guidelines. In Malaysia, SPAC is the market which was arguably wary of and probably a little confused with this unfamiliar new investment status exhibiting a high-risk, high-reward image. Thus, SPAC has the severe hampered in raising the funds due to the people’s low awareness and interest in SPAC (‘Malaysia Becoming A,’2013).
However, SPAC is like a speculative investing, without any fundamental and basic of a proper business in plan. By using top-bottom and bottom-up approach can help the company to acquisition after analysis those company economy situations. However, top-bottom helps the company to analyse the economic perspective while bottom-up helps the company to analyse the performance and achievement of that company. Thus, by using this approach that can benefits to the company and help them to make accurate acquisition. After the company set the acquisition target, they have to evaluate and doing assessment to that target by using top-bottom and bottom-to approach.
Furthermore, the issue of incompetency of management team will influence the company SPAC. Thus, SPAC should provide education and long-term training to employees to increase performance and competency of management team. Training program benefits employees to further their education develop personal and financial skills so can enhance all-round development competencies of each individual and performance better in the working time. Employees become more capable at their jobs because they learn new skills to enhance their efficiency. This can help the employee avoid making mistake and have enough knowledge to promote SPAC investment to investor.
At last, investors may lose some portion of their investment if no Qualifying Acquisition is made and the SPAC is liquidated. Then, the government should come out the policy about SPAC’s Qualifying Acquisition such as time period for acquisition and other regulatory suitable for SPAC to promote public to buy the SPAC investment. For instance, government policy can allow time period for SPAC’s Qualifying Acquisition more than 3 years. Therefore, SPAC have more time to run the operation to fulfil the acquisition accomplishments. They have more time to make deep investigation on the company which they intention to acquisition. They can successfully to acquisition company and bring high return for investor.