ANALYSING THE REGULATORY FRAMEWORK OF i-REITS IN MALAYSIA, SINGAPORE, AND INDONESIA

Authors

  • Nadhrah Diyanah Amin LLM (Islamic Banking and Finance), Harun M. Hashim Law Centre IIUM Gombak Campus, Kuala Lumpur
  • Nurul Hafizah Mohd Aman LLM (Islamic Banking and Finance), Harun M. Hashim Law Centre IIUM Gombak Campus, Kuala Lumpur
  • Rusni Hassan IIUM Institute of Islamic Banking and Finance IIUM Gombak Campus, Kuala Lumpur

DOI:

https://doi.org/10.53840/ijiefer120

Keywords:

i-REITs, Malaysia, Singapore, Indonesia, Regulatory Framework, Doctrinal Research

Abstract

REIT, according to the Security Commission (Malaysia), is an investment that aims to invest in real estate for at least 50%. This investment can be made through two channels: direct ownership or a single-purpose company whose principal asset is real assets. Malaysia can be viewed as a model of a comprehensive framework. Indonesia has an excellent regulatory structure nearly as extensive as Malaysia's. However, there is still a lack of interest in i-REITs there, which could be attributed to a lack of knowledge about i-REITs. Sabana REIT, one of Singapore's most popular "Shariah Compliant '' REITs, has recently opted to abandon its Shariah compliance. Furthermore, the country currently has a formal legislative framework for Islamic REITs, and its governance primarily relies on the Shariah Committee of each i-REIT, which may be more difficult to achieve given that its prime model (Sabana REIT) is no longer Shariah compliant. Therefore, this study aims to further analyse if there is a difference in the development of regulations for i-REITs in Malaysia, Singapore, and Indonesia, along with the challenges that come from expanding investments throughout the ASEAN countries.

Downloads

Download data is not yet available.

References

Al-Haija, E. A., & Syed, M. (2021). Islamic real estate investment trust: comparative study between emirates Islamic REIT UAE and Al Salam Islamic REIT Malaysia. Journal of Islamic Accounting and Business Research, 12(6), 904-918.

Ali, Salman S., ed. (2008). Islamic Capital Markets: Products, Regulation & Development: Proceedings of International Conference. Jeddah, Saudi Arabia: Islamic Research and Training Institute, Islamic Development Bank.

Bursa Malaysia. “Shariah-Compliant Real Estate Investment Trusts (I-REITs).” www.bursamalaysia.com, n.d. https://www.bursamalaysia.com/trade/our_products_services/islamic_market/bursa_malaysia_i/shariah_compliant_real_estate_investment_trusts.

Chern, K.W. (2021, July 22). Sabana Reit to remove syariah-compliance requirement. The Straits Times. https://www.straitstimes.com/business/companies-markets/sabana-reit-to-remove-shariah-compliance-requirement

Daga, A. (2020, December 3). Corporate Singapore faces crunch time in rare clash with activist funds. U.S. https://www.reuters.com/article/us-sabana-shariah-m-a-shareholders-idUKKBN28D0KG

Dusuki, A. W. (2008). Practice and prospect of Islamic real estate investment trusts (I-REITs) in Malaysian Islamic capital market. Islamic Capital Markets, 265.

Hasan, A., & Sulaiman, S. (2016). The Use of Islamic Real Estate Investment Trust (I-REITs) as a Contemporary Instrument in Developing Waqf Assets: Potential Structure, Issues and Challenges. Intellectual Discourse, 24.

Hasan, M.S., & Duriat, F. (2017). “Case Studies of Shariah Governance Practices in Singapore.” Edinburg University Press.

Ibrahim, M. B., Eng, O. S., & Parsa, A. (2009). International articles: Shariah Property Investment in Asia. Journal of Real Estate Literature, 17(2), 231–248. https://doi.org/10.1080/10835547.2009.12090255

Indrawan, I. W., & Ningsih, W. (2019). Literature Review on REITs and Islamic REITs and Lessons Learned for Islamic REITs in Indonesia. International Journal of Islamic Economics and Finance (IJIEF), 2(1), 21-46.

Infovesta. n.d. “DIRE (Dana Investasi Real Estate).” Infovesta. Accessed December 16, 2022. https://www.infovesta.com/index/learning/learning/;jsessionid=3CC475F9519BF29E99B E1BB7FBE7FA8D.NGXB/64.

Islamic Finance News. “Islamic REITs: The Unsung Journey.” Islamic Finance News, 2013. https://islamicfinancenews.com/sites/default/files/newsletters/v10i15.pdf.

Law, Z. (2022, November 15). The (Outdated) persistence of REITS and trust structures in real estate funds. ZICO Law. https://www.zicolaw.com/resources/alerts/the-outdated-persistence-of-reits-and-trust-structures-in-real-estate-funds/

Mohameda, S., Anuarb, M. A., Ahmadc, Z., Abdullahc, N. M. H., Shamc, R., Yaacobb, M., ... & Jaffare, H. H. (2013). A Review on Malaysia and Singapore Islamic REITs Regulatory Structure.

Muhammad Najib Razali, and Foo Sing Tien. (2015). Systematic Risk of Islamic REITs and Conventional REITs in Malaysia. The Journal of Real Estate Portfolio Management 21, no. 1,77–92.

PricewaterhouseCoopers. “Worldwide Real Estate Investment Trust (REIT) Regimes Compare and Contrast 1,” October 2019. https://www.pwc.com/gx/en/assetmanagement/assets/pdf/worldwide-reit-regimes-nov-2019.pdf.

Rozman, A. T., Azmi, N. A., Razali, M. N., & Ali, H. M. (2015). The potential of Islamic real estate investment trusts in Malaysia. PERINTIS eJournal, 5(2).

Ruslan, S. M. M. (2019). The financial performance of Islamic REITs in Malaysia. Asian Academy of Management Journal of Accounting and Finance, 15(1), 191–220. https://doi.org/10.21315/aamjaf2019.15.1.8

Sabana Industrial Reit. n.d. “Sabana Industrial REIT.” Sabana Industrial REIT. Accessed December 16, 2022. https://www.sabana-reit.com.sg/faq.html.

Securities Commission. “Guidelines on Listed Real Estate Investment Trusts.” Securities Commission, June 18, 2019. https://www.sc.com.my/api/documentms/download.ashx?id=afacc30c-060e-4cc0-b40fd4546db74724

Shariah-Compliant Real Estate Investment Trusts (i-REITs). (n.d.). https://www.bursamalaysia.com/trade/our_products_services/islamic_market/bursa_malaysia_i/shariah_compliant_real_estate_investment_trusts

Soon, W. C. K., Hussin, M. Y. M., Muhammad, F., & Yee, C. P. (2021). The Principles of Malaysia Islamic Real Estate Investment Trust: Contemporary Islamic Core Values. Journal of Contemporary Issues and Thought, 11, 94-104.

ST, F. A. (2022). Apa yang Dimaksud dengan DIRE, Dana Investasi Real Estate? Perencana Keuangan Pertama Yang Tercatat OJK. https://www.finansialku.com/dana-investasi-real-estate

Standard Chartered. “Islamic Finance and the Securities Market Outlook for 2023.” Standard Chartered, 2023. https://www.sc.com/en/feature/islamic-finance-securities-market-outlook-2023/.

Sukor, M. E. A., Sujak, Z. A., & Noordin, K. (2020). Conventional REITs, Islamic REITs, and macroeconomic variables in Malaysia: a review. ISRA International Journal of Islamic Finance, 12(1), 131-143.

Suleiman, A., Dewaranu, T., & Anjani, N. H. (2022). Creating Informed Consumers: Tracking Financial Literacy Programs in Indonesia.

Downloads

Published

2023-10-11

How to Cite

Amin , N. D. ., Mohd Aman, N. H. ., & Hassan, R. (2023). ANALYSING THE REGULATORY FRAMEWORK OF i-REITS IN MALAYSIA, SINGAPORE, AND INDONESIA . International Journal of Islamic Economics and Finance Research, (1), 116-131. https://doi.org/10.53840/ijiefer120