The principles of Malaysia Islamic real estate investment trust: contemporary Islamic core values

Choo, William Keng Soon

Abstract

The Islamic capital market operates in parallel with convention capital market in expanding, deepening, and broadening Malaysia financial system. The Islamic Real Estate Investment Trust (Islamic REIT) serves as an alternative Islamic investment instrument to sukuk and shariah compliant stock, which observes Islamic REIT experiencing a significant growth and demand in portfolio property value and Islamic market capitalization. The attractiveness of Islamic REIT has made it to become one of the common real estate investments apart from the physical property investment with a long-term and cheaper capital for property ownership. Likewise, the continual expansion of the Islamic REIT market in Malaysia is making great financial motivation that expands the investment spectrum. Therefore, the need to review the Malaysia Islamic REIT framework to thrive and revitalize structures conforms to the shariah laws and the guideline issued by security commission of Malaysia. This inevitably means the behaviours and operation of sub-Islamic components operating under Islamic financial system need to observe within the rules and principles of shariah laws. Through model of business, investors can invest in an Islamic REIT in the without having to buy, manage, or finance property and income that produced through its various real estate investments.

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