The Malaysian REIT Managers Association (MRMA) has called on policymakers to maintain the existing withholding tax framework for real estate investment trusts (REITs), describing it as an essential foundation for the sector’s continued expansion.
In a recent statement, MRMA emphasised that the framework should be viewed as a strategic policy tool that strengthens Malaysia’s capital markets rather than a form of preferential treatment. According to the association, the current structure has supported the growth of a REIT industry valued at roughly RM60 billion, while also benefiting construction, real estate development and related service industries.
Supporting Investment and Market Competitiveness
MRMA chairman Leong Kit May noted that Malaysia’s REIT sector has a market capitalisation of about US$13 billion (approximately RM51 billion), representing around 3% of the domestic stock market. She pointed out that in more mature markets such as Singapore, REITs account for roughly 10% of market capitalisation, supported by competitive tax policies and investor-friendly regulations.
The association believes that maintaining the current tax framework helps keep Malaysian REITs attractive to both local and international investors by enabling competitive yields and encouraging long-term capital inflows.
Enabling Capital Recycling and New Asset Classes
REIT structures play an important role in recycling capital into emerging and strategic real estate segments, including logistics facilities, digital infrastructure, green-certified buildings and modern business parks. This recycling process allows developers and asset owners to reinvest in new projects, which in turn supports broader economic activity.
In the Klang Valley, for example, REIT-backed investments often include commercial property in KL, business parks and institutional-grade buildings, as well as specialised facilities such as warehouses and industrial property in the Subang area. These assets are critical in supporting supply chains, corporate expansion and the growing e-commerce sector.
Demand for professionally managed properties has also been rising in areas such as office space in Bukit Jalil, where newer developments cater to technology firms, service providers and regional headquarters. At the same time, the expansion of logistics and manufacturing continues to drive interest in factories in Puchong and strategically located industrial land in Selangor, where access to highways, ports and airports remains a key advantage.
Ongoing Dialogue with Policymakers
MRMA stated that it remains committed to engaging constructively with the Ministry of Finance, Securities Commission Malaysia and other regulators. The association has indicated its willingness to provide industry data and analysis to support any policy review process.
Industry participants hope that maintaining the current withholding tax framework will help preserve stability in the REIT sector and enable further growth, particularly as Malaysia positions itself to attract more institutional capital into real estate and infrastructure-related assets.
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