Structuring fund for affordable housing investment in Malaysia: an exploratory research

The purpose of this study is to explore potential fund-raising option that can be developed to attract investment in affordable housing initiatives in Malaysia. In doing so, the study undertakes to discuss the viability of the property trust fund structure as an investment vehicle. The study uses a qualitative design that involves the use of semi-structured questionnaires as a data collection strategy. A total number of ten experts were selected for the interview using critical case sampling scheme based on the purposive sampling strategy. The study discovers that a dynamic fund structure - one that allows for the fund to evolve with changing circumstances and needs - can be adopted. This fund structure comprises a fund that can be initially established as a closed-ended fund. Then, with sufficient track record, the fund can be transformed into a public real estate investment trust, with the prospect of tapping into capital market via issuance of sukuk in the future. The fund can also adopt mezzanine structure of funding, which may reduce investors' risks with minimal government intervention.

Keywords

Housing finance systems , Islamic finance , Institutional investors , Affordable housing , Social investment , Fund development

Citation

Mohd Daud, M. A., Rosly, S. A., & Muhamad Sori, Z. (2020). Structuring fund for affordable housing investment in Malaysia: an exploratory research. International Journal of Housing Markets and Analysis, 14(2), 260-271. https://doi.org/10.1108/IJHMA-03-2020-0024

URL

https://ikr.inceif.edu.my/handle/INCEIF/3300

Publisher

Emerald Publishing Limited

DOI

https://doi.org/10.1108/IJHMA-03-2020-0024

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