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One of the most developed REIT markets of Asia are in Malaysia, and their central point is the Capital, Kuala Lumpur. Right now, there are 18 REITs registered on the stock exchange of Malaysia. They are working so hard, which resulted in attracting many foreign and local investors to the real estate market of Malaysia in the past few years.
Today, we are going to discuss the process of investing in the REITs of Malaysia and how these types of investments are becoming so popular. The popularity of REITs is not only restricted to Malaysia but also growing in Australia, Vietnam, and Thailand.
Key points in this guide:
- REITs (Real Estate Investment Trust) Malaysia list
- How can foreigners buy Malaysian REITs?
- What is the process to buy Malaysian REITs?
- Benefits of buying Malaysian REITs.
- List of Malaysian REITs.
REITs in Malaysia stock Exchange
REITs currently listed on the Malaysian stock exchange:
How can foreigners buy Malaysian REITs?
As a foreigner, you don’t have to worry about specific securities or other restrictions when buying REITs in Malaysia. That is the reason a lot of foreign organizations and individuals trade the Exchange Traded Funds (ETFs) because they are available on all the major stock exchanges of the world.
In simple words, there are different securities involved in the ETFs, and if you invest more, it not only gives you more profit but the risk will also be increased. If you are interested
in the trading of the Malaysian REITs in the Stock Exchange of Malaysia, first, you have to consult a local brokerage firm and local bank to open your account in both places.
What is the process to buy Malaysian REITs?
The process of trading REITs in Malaysia is very simple. Here are a few steps involved in it.
Find a Brokerage Firm
As a Malaysian resident, or if you want to save yourself from high transaction fees by International Brokers, you should hire a local brokerage firm. Some of the well-known brokerage firms are eToro, TD Ameritrade, Interactive Brokers, Macquarie Group Limited, and UOB Kay Hian.
As mentioned earlier, you also have the option to trade ETFs on the stock exchange by hiring international brokers. But also keep in mind that in this way, the options available for you are limited, and you have to pay high transaction fees as well.
If you take help from an international broker, they will charge you $50. On the other hand, taking services from a local brokerage will only cost you up to 28 RM, which is around $7 as transaction fees.
Open a Central Depository System account (CDS)
You have to open a Central Depository System account if you want to trade REITs and stocks. To open an account, you have to pay 10RM, which is a minor amount. On the Malaysian website, Bursa, as a foreigner, if you want to trade securities on the stock exchange, the first thing you have to do is to get in touch with an Authorized Depository Agent (ADA). They are also known as Stockbroking Companies.
When you buy Securities or Units in REITs, they will be deposited into your CDS account.
Documents Needed to Open a CDS
When you want to open a CDS account, you can open it as a corporate investor or as an individual. Following documents must be provided with account fees.
Individual Investor:
- Two Specimen Signature Cards and a “Complete the Account Opening” form.
- Two copies of your certified passport and account opening fees.
Corporate Investors:
- Two Specimen Signature Cards and a “Complete the Account Opening” form
- Two copies of necessary supporting documents such as Board Resolution, a Certificate of Incorporation, and others.
- Account opening fees.
Your CDS account will be open by your Stockbroker on your behalf, and they will give you the account number. You receive a confirmation email from Bursa Malaysia.
Open Malaysian Bank Account
If you want to work with a local brokerage firm, then you must have an account in a Malaysian bank as well. You can only open an account in a local bank when you are a Malaysian resident.
Required Documents:
- Your fingerprints.
- Resident permit or MM2H visa documents
- Photo ID (typically passport)
- Employment details
Benefits of buying Malaysian REITs
There are no issues for foreigners if they want to buy real estate in Malaysia. The real estate ownership policies of Malaysia are considered friendly for most foreigners. But for some lands and sites, a few limitations are also there.
Here are a few major benefits of investing in the REITs of Malaysia:
Market Access
When investing in REITs of Malaysia, you get a lot of opportunities for investments, and you can buy any type of property, such as from hotels to large shopping malls, even in upscale areas.
You can also enjoy the rental income from office buildings, industrial properties, warehouses, and many others. One of the major benefits that REITs provide is to give you access to the local commercial market that is beyond your reach.
Overcoming Foreigner Ownership Regulations
As you have learned earlier, Malaysia has relaxed regulations for foreign ownership of the real estate. Still, there are a few complications for some investors. But with the help of REITs, you can invest in any type of property and also overcome the regulations for foreigner ownership.
Liquidity
You can buy and sell the units with just one click because REITs are liquid. But if you want to deal with this matter physically, you have to visit the unit first for inspection. After that, transfer of title and many other things are there to manage. But with REITs, you can sell and buy units without any issue.
Low Minimum Capital Required
As a foreigner, you should meet the local minimum investment requirements if you want to invest in the real estate of Malaysia. The minimum amount to invest is 3 million MYR which is around $750,000. On the other hand, if you invest through REITs, there is no restriction of minimum investment. You can even start investing with a few hundred US dollars.
High Profits
At least 90% of the profit of the REITs are distributed to the shareholders, and this percentage is universal for REITs. That is the reason REITs are known for their remarkably high profits.