The introduction of Islamic REITs provides an investment opportunity for investors wishing to invest in real estate through Shariah-compliant capital market instruments. International investors seeking Shariah-compliant instruments can buy into Islami...
The introduction of Islamic REITs provides an investment opportunity for investors wishing to invest in real estate through Shariah-compliant capital market instruments. International investors seeking Shariah-compliant instruments can buy into Islamic REITs without the need for direct ownership of such properties.
Islamic REITs also enhances the competitiveness of the Malaysian Islamic capital market by attracting Islamic investors globally. It also broadens and depends on the Islamic product base and encourages savings to be channeled into investments in Shariah-compliant assets.
As long as real estate remains a prominent asset in the sector, Islamic REITs are likely to be well received. Conventional products are limited to conventional investors, but a Shariah compliant product is accessible to all. This allows for greater investor interest, thereby creating the potential for more liquidity and greater returns.
With the growth of the Islamic finance sector over the past few years and the predicted further increase in demand, many existing conventional REITs may consider becoming Shariah compliant in the future.