REIT and Shop Lot Investment in Malaysia

Mr. E intends to invest in property after he receives an amount of sum assured from his deceased father's life insurance. With his own parent taught since his childhood, properties investment is the best investment vehicle that he can park his money in. Net receivable of the sum assured is RM100,000. Mr. E believes in conventional way to invest it in such way to "own" a shop physically at somewhere in the town. However, his wife receives information about REIT from his securities broker.  
 
REIT in Malaysia is not popular, even their DY (dividend yield) recorded 7% - 8% p.a. recently. This is due to limited appreciation of the stock value itself, around 4% p.a. It is about 13 REITs listed in Bursa Malaysia.

Case Study#1: Invest RM100,000 directly to "own" a 2-storey-shop lot at KL

Assumption:

Net rental income is the gross rental income of RM7,000 offset with taxes and maintenance, said RM6,000.

Case Study#2: Invest RM100,000 in REIT

Assumption:

1) dividend per unit paid in semiannual

2) dividend per unit growth at 5% p.a.

3) Capital appreciation at 5% p.a.

Finding:

Case Study#1:

IRR = 22.62% p.a.

NPV@6.5%p.a. = RM1,114,452.25 (Accepted)

Pro/con: 1) consistence monthly rental income that can against inflation, 2) Psychologically "own" the shop, feel more secure, 3) low liquidity, 4) Higher cost (lawyer fees etc), 5) higher return, 6) high maintenance, 7) committed to loan servicing  

Case Study#2:

IRR = 10.28% p.a.

NPV@3.25%p.a. = RM255,567.73 (Accepted)

Pro/con: 1) consistence semi annual dividend income that can against inflation, 2) liquidity very high, switch to other investment vehicle easier, 3) low brokerage fees, 4) lower return, 5) less maintenance, 6) No commitment

Present Value Evaluation (DDM) by using my expected return at 15% p.a.
Case Study#1:
P=D,o(1+g)/(r-g) = 12*6000(1+0.04)/(0.15-0.04) = RM680,727.30 (Assume freehold property)
Case Study#2:
P=D,o(1+g)/(r-g) = 2*2500(1+0.05)/(0.15-0.05) = RM52,500