Investigates the performance of office reits in Malaysia focusing on pandemic (2020-2021), and post pandemic (2022-2023) periods

Lim, Chee Choon (2025) Investigates the performance of office reits in Malaysia focusing on pandemic (2020-2021), and post pandemic (2022-2023) periods. Master dissertation/thesis, UTAR.

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Abstract

This thesis examines the performance of office Real Estate Investment Trusts (REITs) in Malaysia during the COVID-19 pandemic (2020-2021) and the post-pandemic recovery period (2022-2023). The study utilizes key financial metrics, including the Sharpe Ratio, Treynor Ratio, Jensen Alpha, R-Squared, and Risk Diversifiability, to evaluate the risk-adjusted returns, market sensitivity, and overall performance of office REITs across these two periods. The research aims to assess how office REITs adapted to market disruptions caused by the pandemic and how they have performed in the recovery phase. The findings reveal that diversified portfolios and non-office REITs demonstrated superior risk-adjusted returns, with diversified portfolios like ATRIUM (5130) outperforming office�centric REITs during both periods. Office REITs, such as SENTRAL (5123) and IGBCR (5299), showed poor performance, particularly in the pandemic period, due to the significant decline in demand for office space caused by the shift to remote work and economic uncertainties. In contrast, non-office REITs like CLMT (5180) and KIPREIT (5280) showed resilience due to their diversified exposure to sectors such as industrial and retail properties, which were less affected by the pandemic's impact. The Risk Diversifiability analysis highlighted that REITs with more diversified portfolios exhibited higher levels of risk diversification, mitigating exposure to market volatility. Jensen Alpha indicated that ATRIUM (5130) generated returns above expectations, suggesting effective management and strategic portfolio diversification. Conversely, office REITs struggled to meet expected returns, particularly in the pandemic period. This study underscores the importance of diversification in mitigating risk, particularly for office REITs that remain vulnerable to fluctuations in demand for office space. The findings also suggest that non-office REITs are better positioned for long-term resilience in the post-pandemic environment. The research contributes to the literature on M-REIT performance, offering insights for investors, policymakers, and researchers seeking to understand the evolving dynamics of the Malaysian real estate market. Keywords: REITs; Real Estate; Office; Pandemic; Investment

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