Islamic Fund Management
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3. Wider Investor Base
Demand for Shariah-compliant investments has been increasing rapidly, driven by Malaysia’s
relatively large Muslim population. The level of financial inclusion has also grown in tandem
with market education on the importance of savings and financial planning (e.g. children’s
education, retirement). The GOM’s tax-related incentives for the channelling of private savings
to institutional funds (e.g. PRS, children’s education) have further fuelled demand for Shariah
funds.
The presence of institutional investors in Malaysia’s capital market has also played a critical
role in deepening the market’s liquidity. Additional players in the ICM (e.g. Tabung Haji,
investors with a sole appetite to invest in Shariah-compliant assets) enables access to wider
investors.
Islamic REITs
In 2005, Malaysia was the first country to introduce guidelines on Islamic REITs. This
pioneering effort has become one of the many initiatives undertaken by Malaysian regulators
to turn the country into a leader in Islamic finance. The response to the launch of the
guidelines on the development of Islamic REITs had been positive, followed by the listing of
four such REITs. provides a brief description of Malaysia’s Islamic REITs while
an depict the structures of selected Islamic REITs. Traditionally, REITs
are close-ended funds that focus on holding/investing in real estate and related assets.
Table 4.6: Islamic REITs in Malaysia
Al-Aqar KPJ
REIT
Al-Hadharah
Boustead
REIT
AXIS REIT KLCC REIT Al-Salam REIT
Date listed June 2006 January 2007 August 2005 May 2013 September
2015
Type of property Healthcare Oil palm
plantations
Industrial and
office buildings
Commercial
building,
shopping
complex, land
Commercial
building,
shopping
complex,
restaurants
Market
capitalisation (as
at end-2017)
RM1.04 billion Delisted in
2014
RM1.71 billion RM13.45
billion
RM496.0
million
Source: Islamic REITs’ websites
Note: AXIS REIT had originally been established as a conventional REIT, but was restructured into a Shariah-
compliant REIT in December 2008.