How to Buy REITs in Malaysia

Are you looking for a way to invest in real estate without the hassle of owning physical property? Real Estate Investment Trusts (REITs) might be the solution for you. If you're wondering how to buy REITs in Malaysia, you're not alone. REITs are a popular investment vehicle that have grown in popularity among Malaysians seeking passive income and portfolio diversification.

What Are REITs?

REITs, or Real Estate Investment Trusts, are companies that own or finance income-producing real estate. By buying units of a REIT, investors can earn a share of the income generated from commercial properties like shopping malls, office buildings, hotels, and more, without owning the properties themselves. REITs are traded on the Malaysian stock exchange (Bursa Malaysia), making them accessible to everyday investors.

Why Invest in REITs?

There are several reasons why Malaysians are drawn to REITs:

Steady Income: REITs often pay regular dividends, as they are required by law to distribute a significant portion of earnings to unitholders.
Diversification: They provide access to a broad portfolio of properties, lowering your risk compared to buying a single property.
Accessibility: REITs are affordable and easy to buy through the stock market.
Liquidity: Unlike physical properties, REIT units can be easily sold on the exchange.

How to Buy REITs in Malaysia: Step-by-Step

Here’s a simple step-by-step guide on how to buy REITs in Malaysia:

1. Open a CDS and Trading Account

To start, you need a Central Depository System (CDS) account and a trading account with a licensed broker. This can be done at local banks or brokerage firms. Popular brokers include Maybank, CIMB, RHB, and online brokers like Rakuten or M+ Online.

2. Fund Your Account

Transfer funds into your trading account. Make sure you know the minimum deposit requirements and possible charges.

3. Research Malaysian REITs

Research the available REITs on Bursa Malaysia, such as Sunway REIT, Pavilion REIT, or IGB REIT. Look into their portfolios, dividend history, and occupancy rates to make informed choices.

4. Place Your Order

On your brokerage’s online platform or through your broker, search for the REIT’s stock code and place your buy order. Decide on the number of units and the price you’re willing to pay. You can use market or limit orders depending on your strategy.

5. Monitor and Manage Your Investment

After you’ve bought your REIT units, keep track of their performance, dividend payouts, and market trends. Consider reinvesting your dividends or diversifying across different REITs for better stability.

Tips for First-Time Investors

Start small: Don’t invest all your capital in one go. Test the waters and gradually increase your investment as you gain confidence.
Read annual reports: Study each REIT’s prospectus and financial reports for better insights.
Diversify: Don’t put all your eggs in one basket. Spread your investments across different sectors and property types.

Conclusion

Understanding how to buy REITs in Malaysia is straightforward once you know the steps. With their promising dividends and lower entry barriers, REITs are a fantastic option for Malaysians seeking exposure to the real estate sector. Remember to do your research and invest according to your financial goals. Happy investing!