Introduction to REITS (Part 1)

You should invest in property. That standard investment advice has persisted for decades now, but the reality is that property prices are becoming increasingly out of reach for the average Malaysian. This was recently highlighted in a comment by the director of Bank Negara’s Financial Surveillance Department, who said that by international standards, houses in Malaysia are considered “seriously unaffordable”.

Enter Real Estate Investment Trusts, or REITs—investment devices which enable Malaysians to invest in property without having to take on a large mortgage. But what exactly are REITs and what do you need to know before investing in them?

That’s what this two-part guide is all about. In this first part, we will break down what they are—from their purpose to their structure—as well as how they compare to stocks and traditional real estate. In the second part, we will focus on their inherent risks and how to analyse them so you will have a better understanding of how to add them to your investment portfolio.