{"id":18688,"date":"2021-11-08T19:00:00","date_gmt":"2021-11-08T11:00:00","guid":{"rendered":"https:\/\/www.comparehero.my\/blog\/uncategorized\/cons-of-reit.html"},"modified":"2026-03-26T16:00:28","modified_gmt":"2026-03-26T08:00:28","slug":"cons-of-reit","status":"publish","type":"post","link":"https:\/\/www.comparehero.my\/blog\/investments\/cons-of-reit.html","title":{"rendered":"What Are The Cons Of Investing In REITs In Malaysia?"},"content":{"rendered":"\n

Having a Real Estate Investment Trust (REIT) in your portfolio is an attractive alternative investment option as it\u2019s a great way to receive a steady stream of cash in the form of both capital gains and dividends. We\u2019ve outlined this point in the first part of our two-part REIT series<\/a>.<\/p>\n\n

What is REIT?<\/h3>\n

REIT is an investment vehicle that pools a group of investors\u2019 money together in a collective investment scheme and invests it in a portfolio of diversified real estates assets such as shopping malls, offices, hotels or serviced apartments.<\/p>\n

Since it was first introduced in Malaysia in 1989, REITs have allowed small-time investors to acquire and own a small portion of an otherwise expensive piece of real estate<\/a>.<\/p>\n

However, like any other type of investment, REITs carry their own set of risks. For instance, since REITs are traded like a stock, their share prices depend heavily on the broader stock market and the value of the property market.<\/p>\n

Read on to find out what these risks are: <\/strong><\/p>\n

\"02-3-1\"Not a fan of paying withholding tax? Maybe REITs are not for you. <\/em><\/p>\n

1. You still have to pay withholding tax<\/h3>\n

Although there are some clear tax benefits to REITs, unitholders are still liable to tax on the distribution of income and so they are taxed in the year of assessment the distribution is received \u2014 not the financial year of the REITs.<\/p>\n

The government currently imposes a 10% withholding tax on REIT<\/a> dividends to local and non-resident individual investors; investors usually consist of Malaysians, foreigners, individuals, companies or collective investment vehicles.<\/p>\n

Related:<\/strong> #InvestInsights: What Should You Invest in During a Recession? An Expert Weighs In<\/a><\/p>\n

Since 2009, the tax for the REIT dividend is as follows:<\/strong><\/p>\n\n\n\n\n\n\n\n\n
Entity<\/td>\nStatus<\/td>\nTax Type<\/td>\nTax Rate (%)<\/td>\n<\/tr>\n
Company<\/td>\nResident<\/td>\nCorporate Tax<\/td>\n25<\/td>\n<\/tr>\n
Non-Resident<\/td>\nWithholding Tax<\/td>\n25<\/td>\n<\/tr>\n
Foreign Institutional Investor<\/td>\n <\/td>\nWithholding Tax<\/td>\n10<\/td>\n<\/tr>\n
Individual<\/td>\nResident<\/td>\nWithholding Tax<\/td>\n10<\/td>\n<\/tr>\n
Non-Resident<\/td>\nWithholding Tax<\/td>\n10<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\"03-3-1\"<\/p>\n

You may not get to have a say in the day-to-day management of your REIT investment. The flip side: if you enjoy sitting back and letting the experts do the work for you, then REIT is a great fit!<\/em><\/p>\n

2. No real authority or involvement over the management aspects<\/h3>\n

Similar to a robo-advisor<\/a>, an investor does not have full control over the management of their stock because the investment is fully managed by the REIT company.<\/p>\n

Therefore, investors have no real say and are not involved in any decision-making regarding the property in question.<\/p>\n

If you want to be able to have full control over your property investment, investing in traditional property<\/a> gives you that liberty and freedom.<\/p>\n

\"01-3-2\"<\/p>\n

There\u2019s no guarantee that you\u2019ll get good returns with REIT. But to be fair, this concept applies to all forms of investments.<\/em><\/p>\n

Related:<\/strong> 10 Things Successful Investors Don\u2019t Do<\/a><\/p>\n

3. No guaranteed returns<\/h3>\n

This applies to all investments, actually. Though investing in REITs provides consistent dividends, its actual returns still depend on the performance of the property market.<\/p>\n

Due to the COVID-19 pandemic, many malls and offices may have had to shut down their premises due to reported cases or because of lockdown measures \u2014 this could lead to a potential decrease in shopper traffic and tenancy, which could then impact the price of a REIT.<\/p>\n

Related:<\/strong> Here Are 7 Smart Ways To Invest And Grow RM10,000<\/a><\/p>\n

Types of REITs – A list of all 18 Malaysian REITs which are listed on Bursa Malaysia<\/h3>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Real Estate Investment Trust (REIT)<\/td>\nPortfolio<\/td>\nREITs Manager<\/td>\nStock Short Name<\/td>\nStock Code<\/td>\nWebsite<\/td>\n<\/tr>\n
Amanah Harta Tanah PNB<\/td>\nRetail, Office<\/td>\nPelaburan Hartanah Nasional Berhad (PHNB)<\/td>\nAHP<\/td>\n4952<\/td>\nhttp:\/\/www.ahp.com.my\/<\/a><\/td>\n<\/tr>\n
Al-`Aqar Healthcare REIT<\/td>\nHospital, Nursing College, Hotel<\/td>\nDamansara REIT Managers Sdn Bhd<\/td>\nALAQAR<\/td>\n5116<\/td>\nhttp:\/\/www.alaqar.com.my\/<\/a><\/td>\n<\/tr>\n
Al-Salam REIT<\/td>\nCommercial Retail, Office, Industrial Purposes<\/td>\nDamansara Reit Managers Sdn Bhd<\/td>\nALSREIT<\/td>\n5269<\/td>\nhttp:\/\/www.alsalamreit.com.my\/<\/a><\/td>\n<\/tr>\n
AmFirst REIT<\/td>\nOffice, Retail, Hotel<\/td>\nAm ARA REIT Managers Sdn Bhd<\/td>\nAMFIRST<\/td>\n5120<\/td>\nhttp:\/\/www.alaqar.com.my\/<\/a><\/td>\n<\/tr>\n
Amanah Raya REIT<\/td>\nIndustrial, Office, Hotel, Institutions, Retail<\/td>\nAmanahRaya Investment Management Sdn Bhd<\/td>\nARREIT<\/td>\n5127<\/td>\nhttp:\/\/amanahrayareit.com.my\/<\/a><\/td>\n<\/tr>\n
Atrium REIT<\/td>\nIndustrial, Warehouse, Office<\/td>\nAtrium REIT Managers Sdn Bhd<\/td>\nATRIUM<\/td>\n5130<\/td>\nhttp:\/\/www.atriumreit.com.my\/<\/a><\/td>\n<\/tr>\n
AXIS REIT<\/td>\nOffice, Industrial<\/td>\nAxis REIT Managers Berhad<\/td>\nAXREIT<\/td>\n5106<\/td>\nhttp:\/\/www.axis-reit.com.my\/<\/a><\/td>\n<\/tr>\n
Al-Hadharah Boustead REIT *<\/td>\nOil Palm Plantations, Palm Oil Mills<\/td>\nBoustead REIT Managers Sdn Bhd<\/td>\nBSDREIT<\/td>\n5124<\/td>\nhttp:\/\/www.al-hadharahboustead\/<\/a><\/td>\n<\/tr>\n
Capitaland Malaysia Mall Trust<\/td>\nRetail<\/td>\nCapitaMalls Malaysia REIT Management Sdn. Bhd<\/td>\nCMMT<\/td>\n5180<\/td>\nhttps:\/\/www.cmmt.com.my\/<\/a><\/td>\n<\/tr>\n
Hektar REIT<\/td>\nRetail<\/td>\nHektar Asset Management Sdn Bhd<\/td>\nHEKTAR<\/td>\n5121<\/td>\nhttp:\/\/www.hektarreit.com\/<\/a><\/td>\n<\/tr>\n
IGB REIT<\/td>\nRetail<\/td>\nIGB REIT Management Sdn Bhd<\/td>\nIGBREIT<\/td>\n5227<\/td>\nhttp:\/\/www.igbreit.com\/<\/a><\/td>\n<\/tr>\n
KLCC REIT<\/td>\nRetail, Office<\/td>\nKLCC REIT Management Sdn Bhd<\/td>\nKLCC<\/td>\n5235SS<\/td>\nhttps:\/\/www.klcc.com.my\/<\/a><\/td>\n<\/tr>\n
Pavilion REIT<\/td>\nRetail, Office<\/td>\nPavilion REIT Management Sdn Bhd<\/td>\nPAVREIT<\/td>\n5212<\/td>\nhttp:\/\/www.pavilion-reit.com\/<\/a><\/td>\n<\/tr>\n
Quill Capita Trust<\/td>\nCommercial, Carparks, Office, Industrial<\/td>\nQuill Capita Management Sdn Bhd<\/td>\nQCAPITA<\/td>\n5123<\/td>\nhttp:\/\/www.qct.com.my\/<\/a><\/td>\n<\/tr>\n
Sunway REIT<\/td>\nRetail, Hotel, Office<\/td>\nSunway REIT Management Sdn Bhd<\/td>\nSUNREIT<\/td>\n5176<\/td>\nhttp:\/\/www.sunwayreit.com\/<\/a><\/td>\n<\/tr>\n
Tower REIT<\/td>\nOffice<\/td>\nGLM REIT Management Sdn Bhd<\/td>\nTWRREIT<\/td>\n5111<\/td>\nhttp:\/\/www.tower-reit.com.my\/<\/a><\/td>\n<\/tr>\n
UOA REIT<\/td>\nOffice<\/td>\nUOA Asset Management Sdn Bhd<\/td>\nUOAREIT<\/td>\n5110<\/td>\nhttp:\/\/www.uoareit.com.my\/<\/a><\/td>\n<\/tr>\n
YTL Hospitality REIT<\/td>\nHotel<\/td>\nPintar Projek Sdn Bhd<\/td>\nYTLREIT<\/td>\n5109<\/td>\nhttps:\/\/www.ytlhospitalityreit.com\/<\/a><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

There are four Shariah-compliant REITs, these investments derive their income from business activities that are Shariah-compliant, and excludes business activities that are considered unethical such as dealings with alcohol, tobacco, gam<\/em>bling and non-halal food products. Source: Bursa Malaysia listing<\/a><\/em><\/p>\n

The four Islamic or Shariah-compliant REITs (i-REITs) in Malaysia:<\/h3>\n
    \n
  1. Al-\u2019Aqar Healthcare Reit (ALAQAR) \u2013 hospitals and hotels<\/li>\n
  2. Al-Salam REIT (ALSREIT) \u2013 offices and factories<\/li>\n
  3. AXIS REIT (AXREIT) \u2013 warehouses, offices and factories<\/li>\n
  4. KLCC Property Holding (KLCC) \u2013 offices and shops<\/li>\n<\/ol>\n

    How do I invest in a REIT?<\/h3>\n

    If you\u2019ve invested in stocks before then you\u2019ll find that navigating REITs are as easy too, especially because they are listed on our stock exchange, Bursa Malaysia<\/p>\n

    Interested in this topic? Follow our social media accounts @comparehero.my on Instagram<\/a> and Facebook<\/a> to get more investment tips!<\/strong><\/p>\n

    Disclaimer<\/strong>: Neither CompareHero.my nor the content on it is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. The content on CompareHero.my is for general information purposes only and is not intended to be personalised investment advice or a solicitation for the purchase or sale of securities.<\/em><\/p>\n

    Compargo Malaysia Sdn. Bhd. and\/or its affiliates cannot and do not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. CompareHero.my may receive compensation from the brands or services mentioned on this website.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

    Having a Real Estate Investment Trust (REIT) in your portfolio is an attractive alternative investment option as it\u2019s a great way to receive a steady stream of cash in the form of both capital gains and dividends. We\u2019ve outlined this point in the first part of our two-part REIT series.<\/p>\n","protected":false},"author":268230141,"featured_media":1753,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_coblocks_attr":"","_coblocks_dimensions":"","_coblocks_responsive_height":"","_coblocks_accordion_ie_support":"","_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_wpcom_ai_launchpad_first_post":false,"_jetpack_hide_featured_image":false,"_jetpack_featured_image_duplicate_dismissed":0,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"{title}\n\n{excerpt}\n\n{url}","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"_wpas_customize_per_network":false,"jetpack_post_was_ever_published":false},"categories":[424],"tags":[],"class_list":["post-18688","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investments"],"yoast_head":"\nWhat Are The Cons Of Investing In REITs In Malaysia? - CompareHero<\/title>\n<meta name=\"description\" content=\"Though REITs are a great way to build money over time because of its capital gains and dividends, they come with a few drawbacks.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.comparehero.my\/blog\/investments\/cons-of-reit.html\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What Are The Cons Of Investing In REITs In Malaysia? - CompareHero\" \/>\n<meta property=\"og:description\" content=\"Though REITs are a great way to build money over time because of its capital gains and dividends, they come with a few drawbacks.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.comparehero.my\/blog\/investments\/cons-of-reit.html\" \/>\n<meta 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