What is a REIT, and who regulates it in Malaysia?

What is a REIT? Searches for REITs in Malaysia rose sharply in early November 2026, when a large REIT IPO was launched on Bursa Malaysia. This guide explains what a REIT is, who regulates REITs in Malaysia, and how to check the people you deal with.

What is a REIT?

A REIT, or real estate investment trust, pools money from many investors to own property that earns income, such as shopping malls, offices, hotels or warehouses. The Inland Revenue Board of Malaysia (LHDN) describes a REIT as a unit trust scheme that invests, or proposes to invest, mainly in income-generating real estate.

Investors hold units in the REIT, not shares. Listed REITs trade on Bursa Malaysia, alongside listed companies. An Islamic REIT is managed and operated under Shariah principles.

Several parties run a REIT. A management company (the REIT manager) makes decisions for the REIT. A trustee holds the property for the unit holders under a trust deed. A property manager may look after the buildings day to day.

Who regulates REITs in Malaysia?

The Securities Commission Malaysia (SC) is the main regulator. The SC says any REIT seeking a listing on Bursa Malaysia needs SC approval under section 212 of the Capital Markets and Services Act 2007.

Before approval, the SC checks the REIT's properties against its Guidelines on Listed REITs, reviews the trust deed and the prospectus, and checks property valuation reports. The REIT's management company must be licensed. The trust deed and prospectus must be registered with the SC before the REIT lists. For an Islamic REIT, the SC's Shariah Advisory Council must endorse the Shariah requirements. The SC aims to finish its assessment within three months of a complete application.

The SC's REIT rules also cover borrowing, governance and property valuations. In a 2016 consultation, for example, the SC proposed a fixed borrowing limit of 50% of a REIT's total asset value and yearly valuation updates by a registered valuer.

How REIT income and tax work

REITs earn mainly rental income and pay part of it to unit holders as distributions. Under LHDN's Public Ruling No. 9/2018, a REIT listed on Bursa Malaysia that distributes 90% or more of its total income for a year is exempt from tax at the REIT level for that year. Unit holders are still taxed on the distributions they receive, under the rules in the ruling.

Distributions are not fixed. They depend on rental income, costs and borrowing, and a REIT's unit price can go down as well as up, like any listed security.

How to check that a REIT is legitimate and your broker is licensed

A listed REIT has a prospectus registered with the SC, and its announcements appear on bursamalaysia.com. Read the prospectus and the latest announcements rather than relying on social media posts.

Anyone who deals in listed securities for you, such as a stockbroking firm or a trading app, must be licensed by the SC. Check the firm at sc.com.my/investment-checker. Also check the SC Investor Alert List and Bank Negara Malaysia's Financial Consumer Alert List. Be careful with offers that use the word REIT but are not listed on Bursa Malaysia and promise unrealistic returns. SmartChecker shows register records and reviews for the companies it lists.

Common questions

Is a REIT the same as a unit trust? LHDN treats a REIT as a type of unit trust scheme, but a listed REIT's units are bought and sold on Bursa Malaysia, like shares.

Who approves a REIT listing in Malaysia? The Securities Commission Malaysia, under section 212 of the Capital Markets and Services Act 2007.

Do REITs pay tax in Malaysia? A listed REIT that distributes at least 90% of its total income for a year is exempt from tax at the REIT level for that year, according to LHDN. Unit holders are taxed on distributions.

What is an Islamic REIT? A REIT managed and operated under Shariah principles, with Shariah requirements endorsed by the SC's Shariah Advisory Council.