The development of the LPT market is slower compared to overseas REITs. For example, while Malaysia launched its first LPT in 1989, REITs in Japan (introduced in 2000) now amount to 12 listed JREITs with approximately US$11 billion market capitalization (European Public Real Estate Association, 2004). Investors rationalize that small market capitalization, coupled with stringent gearing limit prevent LPTs from acquiring more lucrative prime properties and most investors feel that market capitalization of at least RM500 million per fund is more suitable in the Malaysian context. Some empirical evidence shows that.
