REITs in Malaysia 2026: A Beginner’s Guide to Real Estate Investment Trusts

Updated October 2026

A REIT (real estate investment trust) is a fund listed on Bursa Malaysia that owns income-producing property such as malls, offices, hotels and warehouses. You buy its units through a CDS and trading account, just like shares. Malaysia has 20 listed REITs, and most pay out at least 90% of their income each year, usually quarterly or half-yearly.

Real estate is a key asset class in any investment portfolio. Traditionally, before the introduction of Real Estate Investment Trusts (REITs), investors had limited options to gain exposure to the real estate sector—they either had to buy physical properties or invest in property stocks. Both options required significant capital, making real estate investment an unattainable goal for many.

Today, REITs offer a more accessible and affordable alternative. Instead of purchasing entire properties, investors can now own fractional shares of large-scale commercial real estate—such as shopping malls, hotels, office buildings, and industrial properties—by investing in REITs. This allows them to enjoy rental income distributions and potential capital appreciation without the financial burden of direct property ownership.

For many Malaysians, buying property remains a challenge because of the large down payment, loan commitment and upkeep involved. However, REITs provide a viable solution, enabling investors to benefit from the real estate market with a much lower capital outlay.

With REITs, investors can earn regular income through distributions while gaining exposure to professionally managed real estate assets. Whether you're a beginner investor looking for a low-cost entry point into real estate or a seasoned investor seeking portfolio diversification, REITs are worth understanding before you invest.

What is a REIT in Malaysia?

A REIT is a trust that pools investors’ money to own and manage income-producing property, then pays most of the rental income back to unit holders. In Malaysia, REITs are approved by the Securities Commission and traded on Bursa Malaysia.

A Real Estate Investment Trust (REIT) is an investment vehicle that allows individuals to own shares in income-producing properties without purchasing them outright. These properties, which include shopping malls, office buildings, hotels, warehouses, hospitals, and industrial facilities, are managed by professionals and listed on the Bursa Malaysia stock exchange, making them accessible to everyday investors.

By pooling funds from multiple investors, REITs invest in large-scale real estate ventures. In return, investors receive regular income distributions, often paid quarterly or semi-annually, generated from rental income, property management fees, and potential capital gains from the properties within the REIT’s portfolio.

One notable example is Pavilion REIT, which manages prominent assets such as the Pavilion Kuala Lumpur Mall. Investors in Pavilion REIT benefit from rental income earned by the mall’s tenants, providing a steady income stream without the need to own the entire property.

How many REITs are listed in Malaysia?

There are 20 REITs listed on Bursa Malaysia, according to the Securities Commission’s latest list (31 July 2026), for October 2026. Five of them are Islamic REITs. Together, listed REITs had a market capitalisation of about RM59.3 billion at the end of 2025.

Here are the 20 REITs listed on Bursa Malaysia (SC list, as at 31 July 2026):

Large REITs on Bursa Malaysia by market value

These are the large REITs covered by Kenanga Research, sorted by market capitalisation. Yields are forecast gross distribution yields, not guaranteed payouts, and change with the unit price.

Source: Kenanga Research (Bloomberg data), REIT sector update, 15 July 2026 (prices as at 19 June 2026).

Are REITs safe in Malaysia?

REITs in Malaysia are tightly regulated, but they are not risk-free. The Securities Commission approves every listed REIT and sets rules on how it is run, yet unit prices and distributions can still fall, and REIT units are not protected by PIDM the way bank deposits are.

To ensure transparency and investor protection, REITs must comply with the Guidelines on Listed Real Estate Investment Trusts issued by the Securities Commission Malaysia under the Capital Markets and Services Act 2007. Additionally, all REITs seeking to be listed on Bursa Malaysia require approval from the Securities Commission under Section 212 of the Capital Markets and Services Act 2007.

Among other things, the Guidelines cap a REIT’s total borrowings at 50% of its total asset value, and a trustee holds the properties on behalf of unit holders.

This regulatory framework ensures that REITs operate within clearly defined rules. It does not protect you from losses if property values, rents or the unit price fall.

How do REITs work?

A Real Estate Investment Trust (REIT) operates through a structured ecosystem that connects investors, properties, and professional managers. Here’s a breakdown of how REITs work:

1. Investors and unit holders

REITs pool funds from various investors, including cornerstone investors, institutional funds, and retail investors. To ensure broad participation, a minimum proportion of the REIT’s units must be held by the public, as set out in Bursa Malaysia’s listing requirements. Investors become unit holders, owning shares of the REIT and receiving distributions from its income.

2. REIT management and trustees

A REIT Management Company is appointed to oversee the REIT’s operations, including property acquisitions, tenant management, and financial performance. In return, the management company earns management fees from the REIT. A trustee acts on behalf of the unit holders to ensure that the REIT is managed in their best interest. The trustee safeguards the REIT’s assets and is compensated with trustee fees for their services.

3. Property management and assets

The REIT invests in various income-generating properties such as malls, offices, industrial facilities, and hotels. A Property Management Company is often hired to handle the day-to-day operations of these properties, including maintenance, leasing, and tenant relations, in exchange for service fees.

4. Income distribution to investors

The rental income and fees collected from the properties are pooled into the REIT. After deducting management, service, and trustee fees, the REIT distributes the remaining income to unit holders as dividends. Malaysian REITs that distribute at least 90% of their total income for the year are exempt from tax at the REIT level (section 61A, Income Tax Act 1967), so most pay out at least that much.

What are the benefits of investing in REITs in Malaysia?

REITs let you own a share of large commercial properties with a small amount of money, earn regular distributions, and sell your units on Bursa Malaysia when you need to.

Investing in Real Estate Investment Trusts (REITs) offers a variety of advantages. Here’s why REITs have become a popular choice in Malaysia’s investment landscape:

1. Affordable entry point into real estate

One of the most significant benefits of REITs is their affordability. Unlike purchasing physical property, which often requires hundreds of thousands of ringgit, REITs allow investors to enter the real estate market with minimal capital. 

REIT units trade in board lots of 100 units, so the minimum you need is 100 times the unit price, plus fees. For example, AmFIRST REIT traded at 34 sen in September 2026, so one board lot cost about RM34. This accessibility makes REITs an easy option for beginners who want to build a property investment portfolio without substantial financial outlay.

2. Simplicity compared to traditional property investment

Investing in REITs eliminates the complexities of direct property ownership. There’s no need to worry about securing home loans, managing tenants, or handling legal paperwork. 

REITs are traded on the stock exchange, offering the benefits of real estate investment without the lengthy processes associated with buying and selling physical properties, which can take months or even years to complete.

3. High liquidity for flexible investing

REIT units can be easily bought and sold on Bursa Malaysia, providing high liquidity compared to physical properties. 

Investors can convert their REIT holdings into cash during trading hours through online trading platforms, unlike selling a house or commercial property, which often involves extended timelines and multiple stakeholders. Smaller REITs can trade thinly, though, so selling a large holding quickly may move the price.

4. Regular income from distributions

REITs are known for their regular income streams through dividend payouts. In June 2026, forecast gross yields for the large Malaysian REITs covered by Kenanga Research ranged from about 4.9% to 7.8%, with a sector average of about 6.0%. Because REITs pay out at least 90% of their income to stay tax-exempt, most of what they earn reaches unit holders. 

Distributions are not fixed. They rise or fall with rental income, occupancy and borrowing costs.

5. Professional management

Each REIT is managed by experienced property professionals who oversee property maintenance, tenant management, and asset optimization. 

This means investors benefit from expert management without the hassle of direct involvement.

6. Tax advantages at the REIT level

Transfers of real property to a REIT can qualify for exemptions from stamp duty and Real Property Gains Tax (RPGT), subject to conditions. 

The REIT itself is also exempt from income tax when it distributes at least 90% of its total income. You still pay tax on the distributions you receive (see the tax section below).

7. Diversification across real estate assets

Investing in REITs provides exposure to a diversified portfolio of real estate assets, including retail malls, office buildings, industrial warehouses, and healthcare facilities. 

What are the risks of investing in REITs?

The main risks are falling unit prices, lower distributions when rents or occupancy drop, and higher borrowing costs. A REIT is still a listed investment, so you can get back less than you put in.

Interest rates: when rates rise, REITs pay more on their loans and their yields look less appealing next to fixed deposits and bonds, which can push unit prices down.

Occupancy and rents: empty space, weaker tenants or lower rents reduce income, and so the distributions you receive.

Borrowing: REITs can borrow up to 50% of their total asset value. Higher gearing means less room for error if property values fall.

Concentration: many REITs own only a few properties or focus on one sector, such as malls or offices.

Price swings and liquidity: units trade on Bursa Malaysia, so prices move every day, and smaller REITs may be thinly traded.

Tax changes: how distributions are taxed can change, as it did in 2026.

What kind of returns can be expected from REITs?

 Investors in Real Estate Investment Trusts (REITs) can expect returns in two primary forms:

Income distribution

REITs are designed to generate regular income distributions, similar to dividends, for their unit holders. These distributions are primarily derived from the rental income collected from tenants occupying the REIT’s properties. The amount distributed is based on the distribution policy outlined in the REIT’s deed, with Malaysian REITs needing to distribute at least 90% of their total income annually to qualify for tax exemption. Investors typically receive these payouts quarterly or semi-annually.

Capital gains

In addition to income distributions, investors may also benefit from capital gains when the market price of the REIT units appreciates over time. As the value of the underlying real estate assets increases due to property appreciation, higher rental yields, or improved management, the price of the REIT units may rise, allowing investors to sell their units at a profit. The reverse is also true: unit prices can fall below what you paid.

With the potential for regular income streams and capital growth, REITs sit between fixed income and shares. Here’s how REITs stack up against some common investment options in Malaysia:

See current rates in our fixed deposit rates guide, or compare REITs with other options in our guide to low-risk investments in Malaysia.

How do I buy REITs in Malaysia?

You buy REITs the same way you buy shares on Bursa Malaysia: open a CDS account and a trading account with a licensed broker, fund it, then place an order for at least one board lot of 100 units. Here’s a step-by-step guide:

1. Open a Central Depository System (CDS) account

A CDS account is essential for holding and managing your REIT units, similar to how a bank account holds your money. You can open a CDS account through any authorised brokerage firm in Malaysia.

2. Set up a trading account

Once your CDS account is ready, you’ll need a trading account with a broker or remisier. This account will allow you to buy and sell REIT units on Bursa Malaysia. Many brokerage firms offer online trading platforms, making the process more convenient and accessible. Compare options in our guide to online trading platforms in Malaysia.

3. Fund your account

Before making any trades, you must deposit funds into your trading account. This capital will be used to purchase REIT units.

4. Decide how many units to buy

REIT units are normally traded in board lots of 100 units, so your minimum order is 100 times the unit price. Check the REIT’s latest price, distribution history and annual report before you buy.

5. Buy and sell REIT units

With your accounts in place, you can start buying and selling REIT units during Bursa Malaysia’s trading hours. Just like stocks, REIT units are traded in real-time, allowing you to monitor prices and execute trades through your broker’s platform.

6. Pay transaction fees

When investing in REITs, you’ll incur several fees, including:

• Brokerage commission (charged by your broker for facilitating the trade)
• Stamp duty (imposed on share transactions)
• Clearing fees (charged by Bursa Malaysia for trade settlement)
• Sales and Service Tax (SST) where applicable

How are REIT distributions taxed in Malaysia in 2026?

From 2026, resident individuals must declare REIT distributions in their income tax return and pay tax at their normal rates of 0% to 30%. The old 10% final withholding tax for individuals expired on 31 December 2025.

Until the end of 2025, most investors other than resident companies had 10% tax deducted from REIT distributions, and that was the end of it. The Inland Revenue Board’s Practice Note 2/2026 (18 March 2026) confirms this concession was not renewed. Here is how distributions are now treated:

• Resident individuals: no withholding tax is deducted; you include the distribution as income in your tax return and pay tax at your scale rate.
• Non-resident individuals: taxed at 30%.
• Non-resident companies: 24% final withholding tax.

The REIT itself remains exempt from income tax if it distributes at least 90% of its total income for the year. REIT managers asked for the 10% rate to return in Budget 2027, but Budget 2027, tabled on 9 October 2026, did not announce a return of the 10% rate.

What are the performance indicators of REITs?

When evaluating Real Estate Investment Trusts (REITs), investors rely on key performance indicators to assess their profitability, efficiency, and potential returns. Here are the most important indicators to consider:

1. Distribution yield

The distribution yield reflects the annual income earned from a REIT relative to its market price. This is often published in financial reports and business news.

Formula:

Distribution yield = Income distribution paid to a unit holder/ REIT’s market price or purchase price

A higher yield indicates better income returns, making it a key factor for income-seeking investors. A very high yield can also signal that the market expects distributions to fall, so check why.

2. Net asset value (NAV)

NAV represents the value of a REIT’s underlying real estate assets after deducting liabilities. It gives investors an idea of the REIT’s intrinsic value.

A REIT trading below its NAV might be undervalued, while one trading above could signal strong market confidence.

3. Management expense ratio (MER)

The MER measures the efficiency of the REIT’s management by comparing its operating expenses (such as management fees, property maintenance, and administrative costs) to its NAV.

A lower MER is preferable, indicating that more income is distributed to investors rather than being consumed by expenses.

4. Total return

Total return combines the REIT’s price appreciation with the income distributions received during a specific period.

This metric helps investors understand the overall profitability of their REIT investment over time, making it an essential indicator for long-term performance evaluation.

5. Gearing ratio

Gearing is total borrowings divided by total asset value. The SC limit is 50%; a lower ratio leaves more room to absorb a fall in property values or a rise in interest rates.

Types of REITs in Malaysia

Malaysian REITs are either conventional REITs or Islamic REITs (i-REITs). Five of the 20 listed REITs are Islamic.

The Malaysian REIT market offers investors a diverse selection of options, broadly categorised into two main types:

Conventional REITs

Conventional REITs invest in a variety of real estate sectors, including retail, commercial, industrial, hospitality, and healthcare properties. These REITs aim to maximise returns through rental income, property appreciation, and efficient management.

Examples of conventional REITs in Malaysia include:

• Pavilion REIT – Retail and office properties, including Pavilion Kuala Lumpur Mall.
• Sunway REIT – A diversified portfolio of retail malls, hotels, offices, and industrial properties.

Islamic REITs (i-REITs)

Islamic REITs, also known as i-REITs, comply with Syariah principles, ensuring that their investments and operations avoid non-halal activities such as alcohol, gambling, and interest-based financing. These REITs are overseen by Syariah advisory boards to ensure adherence to Islamic guidelines.

The five i-REITs on the SC’s list (as at 31 July 2026) are:

• Al-Aqar Healthcare REIT (ALAQAR) – Specialises in healthcare properties like hospitals and medical centres.
• Al-Salam REIT (ALSREIT) – Invests in retail, office, and industrial properties that meet Syariah compliance standards.
• Axis REIT (AXREIT) – Industrial and office properties.
• AME REIT (AMEREIT) – Industrial properties.
• KLCC REIT – Office properties, including the Petronas Twin Towers; traded as part of the KLCC Property stapled group (KLCC).

How do I choose a good REIT?

Look at what the REIT owns, where, who the tenants are, how much it has borrowed, and how its distributions have held up over several years, not just its current yield.

Choosing the right Real Estate Investment Trust (REIT) is essential for managing your risk and income. Here are key factors to consider when selecting a REIT:

Frequently asked questions

How many REITs are listed in Malaysia?

There are 20 REITs listed on Bursa Malaysia, based on the Securities Commission’s list as at 31 July 2026. Five are Islamic REITs: Axis REIT, AME REIT, Al-‘Aqar Healthcare REIT, Al-Salam REIT and KLCC REIT. The newest is Paradigm REIT, which listed in June 2025 with three shopping malls.

How much money do I need to start investing in REITs?

REIT units trade in board lots of 100 units, so the minimum is 100 times the unit price plus fees. Prices range from under RM1 to around RM9 per unit, so one board lot can cost from about RM30 to about RM900. Check the current price on Bursa Malaysia or your broker’s app.

Are REIT dividends taxable in Malaysia in 2026?

Yes. The 10% final withholding tax on REIT distributions for individuals ended on 31 December 2025. From 2026, resident individuals declare REIT distributions in their tax return and pay tax at their normal rates of 0% to 30%. Non-resident individuals are taxed at 30%.

How do I buy REITs in Malaysia?

Open a CDS account and a trading account with a licensed broker, deposit money, then buy REIT units on Bursa Malaysia during trading hours, in lots of 100 units. You pay brokerage, a clearing fee and stamp duty on each trade, the same as for shares.

What is the difference between a REIT and an Islamic REIT?

An Islamic REIT (i-REIT) follows Syariah principles and is overseen by a Syariah adviser. It avoids tenants and activities that are not halal, such as alcohol, gambling and conventional interest-based financing. Otherwise, it works like a conventional REIT: you buy units on Bursa Malaysia and receive distributions from rental income.

Are REITs better than fixed deposits?

They do different jobs. Fixed deposits pay a set rate and are protected by PIDM up to RM250,000 per depositor per bank. REITs have recently offered higher yields, around 5% to 8% for large REITs in June 2026, but their prices and distributions can fall, and they have no PIDM protection.

Can you lose money investing in REITs?

Yes. REIT units trade on Bursa Malaysia, so their price can drop below what you paid, and distributions can be cut if rents, occupancy or property values fall, or if borrowing costs rise. Spreading your money across several REITs and other asset classes can reduce, but not remove, this risk.