Personal Finance Term
REIT
Real Estate Investment Trust
A listed company that owns and rents out income-producing property, such as malls, offices, or hospitals, and passes most of the rental income to investors as dividends. It lets you invest in real estate without buying a whole property.
A REIT collects rent from a portfolio of properties and is required to distribute the bulk of its income to unitholders, which is why REITs are popular with income-focused investors. In Malaysia, M-REITs are listed on Bursa Malaysia and bought like shares through a broker and CDS account, giving you exposure to commercial property with a much smaller outlay than buying a unit yourself, plus the liquidity to sell anytime the market is open.
For investors, REITs offer regular income and a way to diversify beyond stocks and bonds, but they are not risk-free: their unit prices move with the market and with property conditions, and rising interest rates can pressure both their borrowing costs and their valuations. Dividends from Malaysian REITs may also be subject to withholding tax depending on the investor's category. A REIT suits someone wanting property-linked income without the hassle of being a landlord, held as part of a broader portfolio.