The Malaysian government has proposed the creation of the world’s first airport real estate investment trust (REIT).
Finance Minister Lim Guan Eng said those investing within the REIT will earn income from user fees collected from the airport management concession holder, Malaysia Airports Holdings Bhd.
“The government hopes to raise US$961.07 million (RM4 billion) from the sale of a 30% stake in the REIT to private institutional investors, who will gain an invaluable opportunity to invest in premium infrastructure assets,” he said while filing the 2019 financial report. Friday in Parliament.
Lim said the REIT would only be implemented once a brand new regulated asset base and user fee structure were negotiated and finalized.
He noted that in the longer term, an airport REIT will have the ability to boost funds publicly by issuing latest REIT units or borrowing to finance the modernization and expansion of airports, especially those scuffling with excess capability.
“This financial structure will significantly reduce the government’s debt burden to self-finance all these projects, while maintaining MAHB as a low-asset operator, not bogged down by large capital investments and debt,” the minister said.
He added that other projects could also profit from similar financing and investment structures, including: hospitals and railway infrastructure.
source: BERNAMA
