MIDF Research expects the Pokemon Go craze to benefit Malaysian real estate investment trusts (REITs) as shopping malls see higher footfalls.Pokemon Go Craze To Benefit REITs Click To Tweet
“Since the release of Pokemon Go in Malaysia on Aug 6, retailers in the local shopping malls have been taking advantage of the Pokemon Go craze. One of the most common ways used by the retailers is by activating the ‘Lure Module’ which attracts Pokemon to the PokeStop for 30 minutes,” it said.
“As a result, we expect increased footfalls at the shopping malls, especially in the Klang Valley, as those malls have become hotspots for Pokemon players.”
The research house noted that the impact is slightly short-term positive to REITs with established malls within the Klang Valley, namely Sunway REIT (Sunway Pyramid), KLCCP Stapled Group (Suria KLCC), Pavilion REIT (Pavilion KL), IGB REIT (Mid Valley Mega Mall & The Gardens) and CapitaLand Malaysia Mall Trust (Sungei Wang Plaza and The Mines).
“We reckon that higher footfalls at the malls might benefit food and beverage (F&B) tenants as Pokemon players would likely spend on F&B during their stay at the mall. However, we do not expect the higher footfalls to significantly boost the sales of fashion retailers as Pokemon players tend to be engrossed in the game.”
It also does not expect any changes to the REITs’ rental revision outlook.
Potential beneficiaries are pure retail REITs or REITs with high exposure on retail division, like IGB REIT, due to higher spending on F&B.
With this, the research house maintained its neutral rating on the REIT sector as it expects the Pokemon Go craze to be short-lived, fizzling out in one to two months’ time.
MIDF Research maintained its buy calls for Sunway REIT (target price at RM1.86) and CapitaLand Malaysia (target price RM1.72).
It noted that Pokemon Go’s earnings impact on REITs will likely be minimal. In fact, most REITs may not be able to capitalise on F&B tenants’ higher revenue since most of the rental are fixed.
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