Equity Malaysia - Real Estate Investment Trust

Real Estate Investment Trusts (REITs)

Real estate or property is a key asset class in an investment portfolio. Typically, before REITs were introduced, an investor may invest in property stocks and/or physical (landed) property to get exposure in the real estate sector.

Investors now have an option to invest in REITs by paying only a fraction of the real estate prices. In other words, REITs provide a way to invest in quality large-scale commercial real estate indirectly which do not need to purchase the property. REITs typically able offer you a stable income stream and attractive distribution yields.

What are the benefits of investing in listed REITs?

• Affordability:

  Investments in REITs cost a fraction of the cost of direct investment in real estate. You can start off with minimal investment outlay.

• Liquidity:

  REITs are more liquid compared to physical properties. Units of listed REITs are readily converted to cash as they are traded on the stock exchange.

• Stable income stream:

  REITs tend to pay out steady incomes (similar to dividends), which are come from existing rents paid by tenants who occupy the REITs’ properties.

• Exposure to large-scale real estate:

  You can derive the benefits of the real estate on a pro-rated basis through a REIT, a quality investment which is affordable

• Professional management:

  You benefit from having the REIT and its underlying assets managed by professionals who will add value for a higher yield.