PETALING JAYA: The Securities Commission Malaysia (SC) will temporarily increase the gearing limit for Malaysian real estate investment trusts (M-Reits) to 60% from 50%, effective immediately, until Dec 31, 2022.
The temporary increase in gearing limit will provide M-Reits greater cash flow flexibility and allow M-Reit managers to manage their Reit’s debt and capital structures more efficiently, especially in light of the challenging operating environment during the Covid-19 pandemic.
“Notwithstanding the temporary increase in gearing limit, the SC expects managers of MREITs to consider sustainability of the Reit and best interests of unit holders, before taking on any additional debt,“ SC said in a statement.
As the financial system adjusts to the impact of Covid-19, the SC continues to monitor the evolving situation in global and domestic markets, to calibrate its responses and update the public accordingly.
The regulator has already introduced an array of measures to assist capital market participants and the industry.