Second Finance Minister Tan Sri Nor Mohamed Yakcop told an investment conference that the pioneering new company would be the first Islamic REIT in the world that was approved and issued under a set of clear and transparent Shariah guidelines.

The REIT, he stated, will create a new Shariah-compliant asset class for investors seeking to diversify their investments

"Islamic REITs will allow foreign investors, in particular Middle East investors, to invest in Malaysia's property market without the hassle and responsibilities associated with the direct ownership of company," he told the Dow Jones-RHB Islamic Malaysia Index Fund last week.

According to the minister, there is a large pool of investible wealth in the Middle East totalling some $1 trillion.

The Al-‘Aqar KPJ REIT, launched by KPJ Healthcare Bhd will have an initial size of 205 million units and will focus on hospitals.

KPJ has plans to expand the size of the REIT due to high demand from Islamic funds, and the company is set to submit another application to the Securities Commission.