In this arrangement, a trustee is entrusted with the responsibility of holding real estate assets on behalf of a group of investors, known as beneficiaries. These investors pool their funds into the trust with the primary objective of generating income and profits from their real estate investments.
Types of real estate
- Development Real Estate Investment Trusts (D-REITs): A D-REIT is a type of REIT in which investors pool their capital together for purposes of acquiring real estate through undertaking development and construction projects and associated activities.
- Income Real Estate Investment Trust (I-REITs): An I-REIT is a type of REIT in which the investors pool their capital for purposes of acquiring long term income generating real estate including housing, commercial and other real estates.
- Islamic Real Estate Investment Trusts (Musharakah): This is a unique type of REITs which only undertakes. Shariah compliant activities. A fund manager is required to do a compliance test before making an investment in this type of REIT to ensure it is Shariah compliant.