KUALA LUMPUR: Malaysia’s real estate investment trust (REIT) sector is positioned for robust growth in 2026, led by an anticipated surge of new listings from major property developers.
Analysts expect these listings to unlock substantial new capital into the market, expanding the sector’s asset base and offering investors additional opportunities to gain exposure to high-quality retail, industrial, and office properties.
According to RHB Research, some RM10 billion to RM11 billion worth of assets could enter the market through these exercises, providing fresh opportunities for investors.
This anticipated wave of activity reflects developers’ strategic push to monetise their real estate holdings, diversify funding sources, and capitalise on growing demand for yield-generating instruments amid a supportive macroeconomic and interest-rate environment.
RHB Research is keeping its “Overweight” stance on the sector, supported by expectations of a lower interest-rate environment, which generally benefits yield-driven instruments like REITs.
Policy initiatives are also expected to provide incremental support for the sector. RHB noted that Visit Malaysia Year 2026 (VMY2026) and strategic initiatives under the National Energy Transition Roadmap and New Industrial Master Plan 2030 should particularly benefit retail and industrial REITs.
“Our top pick is Pavilion REIT, given its larger floating-rate exposure and strong retail positioning to capture VMY2026-related tourist arrivals,” the firm said.
On the acquisition front, Hong Leong Investment Bank Bhd (HLIB) flagged several near-term pipelines worth monitoring. These include Paradigm REIT, AmanahRaya REIT, and UOA REIT.
Paradigm REIT is planning to inject three properties – Hyatt Place Johor Bahru Paradigm Mall, Le Méridien Petaling Jaya, and Premier Hotel Klang – valued at about RM500 million, targeted for the second half of 2026.
AmanahRaya REIT is aiming to acquire an industrial building in Telok Panglima Garang, Selangor, for RM39 million, while UOA REIT is intending to acquire Tower 2A, Tower 2B, and a car park at UOA Business Park in Glenmarie, Shah Alam, for RM200 million.
HLIB also noted the strong performance among existing REITs. Sunway REIT, Pavilion REIT, Axis REIT, and KIP REIT all recorded double-digit year-on-year growth, supported by recent acquisitions and improved rental performance.
Sunway REIT benefitted from the injections of Sunway 163 Mall, Kluang Mall, Sunway Oasis and Aeon Mall Seri Manjung, strengthening its retail portfolio. The completion of Phase 2 of Sunway Carnival Mall refurbishment in May 2025 also contributed to the growth.
Pavilion REIT continued to benefit from its hotel injections, while KIP REIT’s growth was supported by the acquisitions of KIPMall Desa Coalfields, KIP Kuantan and Bintulu Industrial Land.
Looking ahead, HLIB said the REIT sector is expected to see earnings supported by company-specific strategies, such as asset injections, tenant remixing, and improved occupancies.
“From the fourth quarter onwards, REITs with recently completed acquisitions should see stronger contributions. IGB REIT’s earnings, for example, will be supported by the injection of Mid Valley Southkey completed in November 2025,” HLIB added.
The office segment recovery remains robust across the sector, with most REITs reporting higher occupancies and sustained positive rental reversions. During the recent results season, five of the six REITs under HLIB’s coverage – Sentral REIT, IGB Commercial REIT, Axis REIT, KLCC REIT, and Pavilion REIT – delivered earnings in line with both HLIB’s and consensus expectations.
Overall, HLIB maintained its “Overweight” view on the REIT sector, citing its defensive characteristics, resilient income profile, and attractive valuations as key drivers supporting investor interest heading into 2026.
Source: New Straits Times (18 December 2025)