Why a REIT can be your best property investment choice

Why a REIT can be your best property investment choice

When we talk about property investment, most of us immediately think:

Buy a property. Take a loan. Find a tenant. Collect rent. Wait for the price to go up.

That’s what I did, too.

I have properties in different cities and towns in Malaysia, and I still like physical property.

But over the years, I have also realised something:

We don’t necessarily need to buy an entire property to invest in property.

This is where REITs — Real Estate Investment Trusts — become interesting.

I wrote about REITs before, when there was talk about another possible REIT coming to Bursa Malaysia.

Today, I think it is worth revisiting the topic because REITs have become an increasingly interesting way for someone like me to get exposure to property without taking a RM500,000 or RM1 million mortgage.

#1 – YOU DON’T NEED TO BUY THE WHOLE BUILDING

Imagine this.

There is a shopping mall worth RM1 billion.

I cannot afford to buy the mall.

Actually, even if I could afford it, I probably don’t want the headache.

Tenants. Maintenance. Renovation. Vacancies. Property management.

Bank loans. But through a REIT, I can buy units representing a small ownership interest in a portfolio of properties.

That’s the beauty of it.

Bursa Malaysia describes REITs as a way for investors to gain exposure to large-scale real estate by investing only a fraction of what direct property ownership would require. They can also provide income distributions and professional management. (Bursa Malaysia)

So instead of asking:

“Do I have RM1 million to buy a commercial property?”

I can ask:

“How much do I want to allocate to property through REITs?”

That’s a very different starting point.

#2 – REITs ARE MUCH MORE LIQUID

This is perhaps the biggest difference between physical property and REITs.

If I own a condominium worth RM600,000 and suddenly need RM50,000, I cannot simply sell RM50,000 worth of my condominium.

I have to sell the property.

Find a buyer. Negotiate. Sign documents. Wait.

Pay transaction costs.

A REIT is different.

Listed REIT units are traded on Bursa Malaysia.

If I need RM5,000, I can potentially sell part of my holdings.

That flexibility is valuable.

Physical property is relatively illiquid.

REITs are much more liquid.

Of course, the REIT price can go down when I need to sell.

Liquidity doesn’t mean guaranteed profit.

But at least I have the ability to buy or sell relatively quickly.

#3 – THE RENT CAN COME TO YOU

This is the part that makes REITs particularly interesting to me.

What does a REIT own?

It could own:

Shopping malls.

Office buildings.

Hotels.

Industrial properties.

Warehouses.

Hospitals.

Different REITs have different portfolios. The tenants pay rent. The REIT earns income from these properties.

After expenses and other obligations, distributions can be made to unitholders.

So in a way, we are participating in rental income without becoming the landlord ourselves.

I like being a landlord.

But I don’t necessarily want to be the landlord of a 500,000 sq ft shopping mall.

Haha. Let someone else handle that.

#4 – PROFESSIONAL MANAGEMENT

This is another major benefit.

If I buy a condominium, I become responsible for my own investment decision.

If the tenant doesn’t pay, I have a problem.

If the air-conditioner breaks, I have a problem.

If the unit is vacant for six months, I have a problem.

With a REIT, professional managers manage the portfolio.

That doesn’t mean they are perfect. They aren’t.

REITs still have vacancies, financing costs, refinancing risks and property-market risks.

But I don’t personally need to manage every tenant and every property.

That’s a huge difference.

#5 – THE RETURNS CAN BE INTERESTING

This is where I would ask readers to look at the numbers rather than simply listen to me.

Current market data shows that Malaysian REIT distribution yields vary considerably.

For example, recent market data shows some M-REITs offering yields in the 5%–9% range, depending on the REIT and the market price at which units are bought. (Maybank Investment Bank)

Maybank’s April 2026 research projected a simple-average gross distribution yield of around 7.1% for its covered M-REITs for 2026, although individual REITs vary significantly. (Maybank Investment Bank)

But please don’t read this as:

“REITs give 7% guaranteed.”

No.

The yield changes with the unit price.

And distributions can change.

The underlying properties still have to perform.

A REIT with a high yield may also carry higher risks.

So I would never choose a REIT simply because the number beside “yield” is the biggest.

#6 – YOU CAN CHOOSE THE TYPE OF PROPERTY

This is another reason I find REITs fascinating.

Suppose I believe malls will continue to do well.

I can look at retail-focused REITs.

Suppose I believe logistics and industrial properties will benefit from Malaysia’s manufacturing and data-centre growth.

I can look at industrial REITs.

Perhaps I prefer hotels because I believe tourism will continue to grow.

There are hospitality-focused REITs.

Or perhaps I like healthcare properties.

There are healthcare REITs too.

In other words:

I can choose my property exposure without buying the physical property.

And this is where REITs fit nicely into a diversified portfolio.

#7 – BUT PLEASE DON’T THINK REIT = FIXED DEPOSIT

This is important.

A REIT is not a fixed deposit.

The unit price can fall.

The distribution can fall.

Interest rates can affect valuations.

Property values can change.

Tenants can leave.

Debt costs can rise.

Office properties can face structural changes.

And a shopping mall can lose tenants.

So if someone tells me:

“Buy this REIT because it gives 7% dividend.”

My next question is:

“Why is it giving 7%?”

Maybe the property portfolio is fantastic.

Or perhaps the unit price has fallen because the market sees some risk.

We need to understand the story behind the yield.

SO, WOULD I INVEST IN REITs?

I don’t currently own REITs, as I said in my original article.

That’s still my position.

Why?

Because my personal property portfolio already gives me significant exposure to physical property.

But that doesn’t mean I don’t find REITs attractive.

In fact, if someone told me:

“Charles, I want exposure to property but I don’t want to take a RM500,000 mortgage.”

I would definitely tell that person:

“Go and learn about REITs.”

Because the choice doesn’t have to be:

Property OR shares.

It can be:

Property AND REITs AND shares AND cash AND other investments.

That’s diversification. And after investing for more than 20 years, I think this is something I appreciate more and more.

We don’t need to put everything into one asset.

A REIT allows us to own a small piece of a much bigger property portfolio.

We can potentially receive distributions.

We can buy and sell more easily.

We can diversify across different property sectors.

And we don’t have to deal personally with every leaking pipe.

Haha.

For me, that’s quite a compelling combination.

So, should you buy a REIT?

Because whether it is a RM1 million condominium or a RM1,000 investment in a REIT, the principle remains the same.

Don’t invest in something simply because someone tells you it will make money.

Understand it first.

Then decide.

Happy investing.

Happy learning.

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Sources

• Original Kopiandproperty article — “Benefits of Investing into REITs. Another REIT choice may be coming” — the original article, including my earlier explanation of REITs, their benefits, the potential WCT REIT and my personal position at the time. Original Kopiandproperty article
• Bursa Malaysia — Real Estate Investment Trusts (REITs) — official explanation of REIT structure, affordability, liquidity, income distributions, property exposure and professional management. Bursa Malaysia REIT information
• Maybank Investment Bank Research — Malaysia REITs, April 2026 — current analyst estimates for M-REIT yields and sector outlook. 
• Maybank Investment Bank Research — Malaysia REITs, January 2026 — discussion of 2026 M-REIT earnings, yield expectations, interest-rate environment and risks including taxation. 
• Securities Commission Malaysia — regulatory framework and information relating to listed Malaysian REITs. Securities Commission Malaysia