Table of Contents
Real Estate Investment Trust (REIT)
If you’re on an investing journey in Malaysia, chances are you’ve come across the term REIT.
A Real Estate Investment Trust (REIT) is a company that owns and operates income-producing real estate REITs – think shopping malls, office towers, hotels, hospitals, and industrial warehouses. REITs are listed publicly on stock exchanges, making them accessible to everyday investors like you and me.
Malaysian REITs, like REITs around the world, enjoy special tax considerations from the government and typically offer higher dividend yields compared to regular stocks. This makes them one of the most popular investment vehicles for passive income seekers in Malaysia.
The concept of REITs originated in the United States in 1960, opening up large-scale real estate investment to the general public for the first time. Malaysia followed suit in 2004 when Axis REIT became the first REIT listed on Bursa Malaysia – a full 44 years after the US, but we’ve come a long way since. As of 2026, there are 20 REITs listed on Bursa Malaysia, spanning retail, commercial, industrial, healthcare, hospitality and more.
What are REITs?
REITs are all around us, in fact, one could even say that almost every Malaysian has been in contact with a REIT in one form or another. Every time you walk into a shopping mall, step into an office building, check into a hotel, or drive past an industrial warehouse, there’s a good chance a REIT owns and manages that property.
Think about your favourite malls: Mid Valley Megamall and The Gardens Mall belong to IGB REIT, while Sunway Pyramid belongs to Sunway REIT. Both have been solid, consistent performers in my Freedom Fund over the years and are great examples of how REITs work in practice.
When I explain REITs to people, I like to compare them to unit trusts or mutual funds – but for real estate. Instead of pooling money to buy stocks or bonds, a REIT pools money from thousands of investors to acquire and manage large-scale properties. The beauty of this structure is that it allows everyday investors like us to own a slice of an otherwise impossibly expensive piece of real estate – for as little as a few hundred ringgit.
Malaysian REITs remain one of the most underrated investment securities on Bursa Malaysia. They’ve been gaining well-deserved traction in recent years as a defensive, income-generating asset that belongs in every portfolio. They are particularly well-suited for beginner investors thanks to their relatively low-risk nature, consistent dividend payouts, and the transparency that comes with being a listed entity on Bursa Malaysia.
How do I invest in REITs in Malaysia?
You’d be surprised how often I get asked this question. Many Malaysians simply aren’t aware that REITs are actually listed right here on Bursa Malaysia, meaning you can own a piece of Malaysian real estate through the stock market, from your phone, with just a few hundred ringgit.
To put it simply – REITs are shares. You buy and sell REITs exactly the same way you buy and sell any other stock on Bursa Malaysia. All you need is a CDS account and a brokerage account with any licensed broker in Malaysia.
To get started with share investing, check out my beginner’s guide here. Once you have your brokerage account set up, simply search for any REIT by its stock short name (e.g. IGBREIT, SUNREIT, AXREIT) and you’re good to go.
If you’re looking for the best broker to use in Malaysia, I’ve also put together an updated Malaysia Stock Brokers Comparison to help you pick the right one based on fees, platform and reliability.
Tax Advantages of REITs in Malaysia (updated 2026)
The Malaysian government has consistently introduced tax incentives to promote REITs in the capital market, making them one of the most tax-efficient investment vehicles available to Malaysian investors.
Income Tax Exemption at the REIT Level
One of the biggest tax benefits is that income earned by the REIT itself is exempted from income tax – as long as it distributes at least 90% of its current year taxable income to unitholders.
This allows REITs to distribute income on a gross basis, which is a key reason why dividend yields from REITs tend to be significantly higher than regular stocks. Most Malaysian REITs distribute well above the 90% threshold, making this exemption practically universal across the sector.
Withholding Tax – The Big Change in 2026
This is the most significant update to REIT taxation in years, and every Malaysian investor needs to understand it.
Previously, a flat 10% withholding tax was automatically deducted from your REIT dividend distributions regardless of your income level. It was simple, predictable, and frankly quite fair for most retail investors.
Effective YA 2026, the flat 10% withholding tax has been abolished for resident individual investors. REIT distributions are now taxed at your personal marginal income tax rate, which ranges from 0% to 30% depending on your total annual income. Here’s how it breaks down in practice:
| Annual chargeable income | Tax rate | Impact on REIT dividends |
|---|---|---|
| Below RM35,000 | 0% – 3% | Little to no tax on dividends |
| RM35,001 – RM100,000 | 8% – 21% | Moderate tax, still competitive |
| RM100,001 – RM250,000 | 24% | Higher than the old 10% flat rate |
| Above RM250,000 | 25% – 30% | Significantly higher than before |
| Non-residents | 30% | Flat rate, highest bracket |
What this means for the average Malaysian investor
For most everyday retail investors – salaried employees, fresh graduates, young professionals just starting out, this change is actually good news. If your chargeable income is modest, you will pay less tax on your REIT dividends than before, or potentially none at all.
However, for higher income earners with chargeable income above RM100,000, your REIT dividends will now be taxed at a higher rate than the previous flat 10%. This is worth factoring into your investment strategy, particularly if REITs form a large part of your portfolio.
One important practical note, unlike the old system where withholding tax was automatically deducted at source, you will now need to declare your REIT distributions in your annual LHDN tax filing. Make sure you keep track of all dividend statements from your REITs throughout the year.
Stamp Duty & RPGT Exemption
Another major advantage is the exemption from taxes on property transactions. When a Malaysian REIT acquires properties, it is exempt from stamp duties – normally fixed at up to 3% of the purchase price. When REITs dispose of assets, they are also exempt from Real Property Gains Tax (RPGT). The savings from these exemptions run into the millions and ultimately flow back to investors in the form of higher distributions.
For a deeper dive into the tax treatment of Malaysian REITs, I’ve written an extended article here.
Why Invest in Malaysian REITs?
Let’s compare REITs to other investments, stocks, unit trusts, and physical properties – and see why Malaysian REITs deserve a place in your portfolio.
1. 90% Distribution = Huge Dividend Yields
As mentioned earlier, in order to enjoy the income tax exemption, Malaysian REITs must distribute at least 90% of their taxable income to unitholders. That means 90% of all rental income collected from those massive shopping malls, office towers, hotels and warehouses flows directly to shareholders like you and me.
On top of that, the savings from stamp duty and RPGT exemptions, which run into the millions, are also eventually passed on to investors in the form of higher distributions. This is why dividend yields from Malaysian REITs consistently outperform most other stocks on Bursa Malaysia, with average yields currently sitting around 4–6% per annum in 2026.
This is also why I’ve always viewed REITs as a defensive, income-generating cornerstone of any Malaysian investment portfolio.
2. Instant Diversification
REITs offer diversification in ways that are simply impossible with physical property. Take Sunway REIT for example – by buying a single stock, your money is instantly spread across retail malls, hotels, offices and medical facilities across multiple states in Malaysia.
Compare that to owning physical property: most individual investors, constrained by capital and time, manage at best 2–3 properties in their lifetime, usually in the same location and asset type. With REITs, diversification comes built-in from day one.
3. Low Initial Investment
You don’t need hundreds of thousands of ringgit to own a piece of Mid Valley Megamall or Sunway Pyramid. With Malaysian REITs, you can start investing in world-class real estate with as little as RM1,000. That said, to make brokerage fees worthwhile, I’d recommend starting with at least RM3,000, with RM7,000–RM8,000 being ideal for a more meaningful position.
You can compare Malaysian brokerages and their fee structures here to find the most cost-effective option for your situation.
4. Liquidity
This is one of the most underrated advantages of REITs over physical property. You can buy or sell your REIT units in minutes through your brokerage app. Now contrast that with selling an apartment – the lawyers, the agents, the negotiations, the waiting. We’re talking months, not minutes, and thousands in fees.
Liquidity matters most when you least expect it. Whether it’s an emergency or simply a better opportunity elsewhere, being able to exit your position quickly and cheaply is a huge advantage that physical property simply cannot offer.
5. Let the Professionals take care of it
When you invest in a REIT, you’re not just buying property – you’re hiring some of the best real estate professionals in the country to manage it for you. The teams running Malaysia’s top REITs have decades of experience in acquisitions, asset management, tenant relations and capital allocation. They handle everything from the day-to-day operations, lease renewals, property upgrades, all the way to strategic expansions.
That means your REIT dividends are truly passive income – you collect the distributions while the professionals do all the heavy lifting.
6. Transparency & Regulation
As publicly listed entities on Bursa Malaysia, REITs are subject to strict regulatory oversight by the Securities Commission Malaysia. Quarterly reports, annual reports, distribution announcements and material transactions are all publicly disclosed. You always know exactly what you own, what it’s worth, and how it’s performing – something physical property investors rarely have.
How many REITs are there in Malaysia?
There are a total of 21 REITs listed on Bursa Malaysia as of May 2026.
The landscape has changed quite a bit since I first wrote this guide back in 2016 – some REITs have been delisted, merged or rebranded, and new ones have come along. Of these, I currently own 2: IGB REIT and Sunway REIT.
| REIT Portfolio | Sector | Stock Short Name |
|---|---|---|
| Al-Aqar Healthcare REIT | Healthcare, Hotels | ALAQAR |
| Al-Salam REIT | Office, Industrial | ALSREIT |
| AME REIT | Industrial, Logistics | AMEREIT |
| AmanahRaya REIT | Industrial, Office, Hotel, Retail | ARREIT |
| Atrium REIT | Industrial, Warehouse | ATRIUM |
| Axis REIT | Industrial, Office, Warehouse | AXREIT |
| CapitaLand Malaysia REIT | Retail | CLMT |
| Hektar REIT | Retail | HEKTAR |
| IGB REIT | Retail | IGBREIT |
| IGB Commercial REIT | Office | IGBCR |
| KLCC REIT | Retail, Office | KLCC |
| MRCB-Quill REIT | Commercial, Office, Industrial | MQREIT |
| Pavilion REIT | Retail, Office | PAVREIT |
| Pelaburan Hartanah Nasional | Retail, Office | PHBR |
| Sentral REIT | Office, Transport Hubs | SENTRAL |
| Starhill REIT | Commercial | STAREIT |
| Sunway REIT | Retail, Hotels, Office | SUNREIT |
| Tower REIT | Office | TWRREIT |
| UOA REIT | Office | UOAREIT |
| YTL Hospitality REIT | Hotels | YTLREIT |
My Investment in Malaysian REITs
REITs make up a huge proportion of my Freedom Fund and are my dividend cash cows. I’ve held IGB REIT and Sunway REIT for many years now and both have been solid, consistent performers.
For a more general introduction to investing in Malaysia, head over to my Guide to Stock Investment in Malaysia.
What are the REITs you’ve invested in? Drop a comment below – I’d love to know!
End.
I hope this guide has been able to shed some light on REITs in Malaysia. I am not against anyone purchasing a physical property – it is a perfectly valid investment. But one should always make decisions based on as much information as possible, and I believe REITs are a very viable and often overlooked option in Malaysia.
| REITs | Physical Property |
|---|---|
| Dividend yield: 5–7% | Rental yield: 3–5% |
| Liquid | Illiquid |
| Low transaction costs, doesn’t take up time | High transaction costs, time consuming |
| Managed by experts | Self-managed mostly |
| Highly diversified | Very little chance at diversification |
Physical properties get so much hype because every Tom, Dick and Harry loves to brag about earning RM100K or RM1 million flipping properties. Yes, it happens — but let’s be honest about why. You’re borrowing 90% from the bank to finance that deal. The returns look impressive because of leverage, not because property is inherently superior. If any bank were crazy enough to lend you that same amount to invest in stocks, you’d see similarly impressive numbers there too.
At the end of the day, REITs are still an investment and carry their own risks. They are susceptible to market risks, interest rate movements and economic downturns. Always do your own due diligence before putting your money in.
That said, REITs are defensive stocks and are generally less volatile compared to other equities. I love them for their consistent dividend yields and they will continue to be a core part of my portfolio for years to come.
As it has always been my mantra, I say – To each his own. Invest in what you know and what you feel comfortable in. If it is properties, by all means, invest and plough your trade in the property market. However, for the rest of you, please give REITs your consideration the next time you are making an investment decision. I have been advising my clients to invest in REITs for years now and there have been no regrets.
Before you start investing, I’d suggest taking a look at the Basic Financial Plan I drafted — it’s free and a good starting point to make sure you have a proper plan in place before putting your money to work.
Let me know if I’ve missed anything important on Malaysian REITs. I will be continuously updating this page when I come across any relevant information so don’t forget to subscribe to the site, bookmark this page and check back often.
For the next article of the Investing Series, check out article 003 – Malaysia Stock Brokers Comparison.
As always, my Facebook and Instagram. Follow, and keep up to date.