This article first appeared in Wealth, The Edge Malaysia Weekly on January 26, 2026 - February 1, 2026

Real estate is one of Malaysia’s favoured investment asset classes, which explains the popularity of real estate investment trusts (REITs) among retail investors seeking exposure to malls, offices, hospitals, industrial warehouses and other income-generating properties.

Driven by market innovation and technological advancement, new ways of investing in real estate — particularly residential properties — have emerged, following the entry of Urban NX Sdn Bhd (Urby) and Wahed X Sdn Bhd (Wahed) into the Securities Commission Malaysia’s inaugural regulatory sandbox, announced late last year.

Urby and Wahed allow investors to gain fractional exposure to residential properties with small sums of capital. Urby’s minimum investment starts at just RM10 and Wahed’s begins at RM500.

The key differentiator lies in the degree of investor control. Unlike REITs, where capital is pooled into a professionally managed trust that owns income-generating commercial properties, these platforms allow investors to directly select individual residential properties in which they wish to take fractional exposure.

In industry parlance, Urby’s and Wahed’s offerings fall under fractionalised real estate investment. As these products have been newly introduced to the Malaysian capital market, Wealth speaks to Urby and Wahed to better understand their operations, risks and opportunities.

Urban NX Sdn Bhd (Urby) aims to kill two birds with one stone — channelling capital into upcycled vacant homes while giving investors a way to invest in these properties without having to buy or manage them.

These properties are usually older, landed homes in mature Klang Valley neighbourhoods that were previously vacant or dilapidated, and have since been refurbished and modernised before being offered to investors.

Urby operates as an investment platform that allows investors to browse individual properties put forward by property owners or developers and select which ones to invest in. Investors can get started with as little as RM10 and invest up to RM25,000 per property.

Returns are realised when the house is sold or repurchased by the homeowner, with proceeds credited to the investor’s bank account for withdrawal.

The investment time horizon and potential returns vary depending on the model chosen. As at Jan 11, 19 properties were listed on the platform, split into two categories — FastTrack and co-owned. Of these, 11 properties fall under FastTrack and the remainder are co-owned homes.

For FastTrack homes, estimated net returns currently range from 6% to 12% per property, with an expected sale within six to 12 months, says Ang Shu Yi, product manager of Urby.

FastTrack homes are properties purchased outright by a property owner, who then lists the home on Urby. The property owner retains full control over the refurbishment process, sale timeline and pricing, while investors earn a share of the profits when the house is sold.

So far, two FastTrack properties have been sold, delivering realised returns. The first was Ketupat House in SS5, Kelana Jaya. Initially listed at a share price of RM9.50, it was redeemed at RM11.17 per share about six months later, translating into a return of about 17%.

The other was Gable House in Gasing Indah, Petaling Jaya, which sold for RM1.21 million. First listed at RM9.78 in April 2025, it was redeemed at RM11.11 last November, resulting in a return of 13.5% over seven months, according to data from the platform.

Meanwhile, co-owned homes are properties jointly acquired by UrbanWave — the sole lister on Urby at the time of writing — and a resident buyer under a home co-ownership model.

UrbanWave provides upfront cash for renovations in exchange for a minority equity stake, while the resident buyer continues to live in the home and retains control over the upcycling process.

Over time, the resident buyer may repurchase UrbanWave’s stake at prices set upfront under an agreed schedule, or both parties may realise gains based on their equity stakes if the property is sold to a third party.

These co-owned investments are structured as long-term holdings, with a time horizon of five to 10 years and targeted annualised returns of around 8%, says Ang.

UrbanWave is a property company that acquires, renovates and sells vacant or underutilised landed homes. Both Urby and UrbanWave are subsidiaries of UrbanMetry, a property data and analytics firm.

Urby plans to open its platform to additional listers over time. At the time of writing, it had about 800 users, with roughly RM1.5 million invested across its listed properties.

The platform aims to reach around 5,000 users by end-2026, with a target of deploying RM10 million into properties in that period, says Stirling Yiin, head of Urby.

“Urby’s current operations and investment models are not the finalised version that will be overseen within the SC sandbox. While we anticipate the core concept of the model to remain consistent, we will be guided by SC in the next few months to improve on the mechanics of listings and security specifics to enhance protections for our investors," he says.

Urby is now focusing on FastTrack properties, with all upcoming listings falling under this category, as the model is simpler to execute, easier for investors to understand and offers a shorter, clearer exit timeline.

Yiin says a property appears on the Urby platform only after it has been fully acquired. Investor funds are not used to purchase homes upfront, as Urby is not a crowdfunding platform.

Instead, UrbanWave, currently the sole lister, acquires properties first, using its own capital as well as funding from institutional investors. Investor money is then used to fund the overall acquisition and redevelopment costs.

“The lister has to use its own working capital to execute the property purchase first because of the speed and cost involved in making these residential property transactions viable,” explains Yiin.

“Capital formation using a typical crowdfunding model would result in lost opportunities and incur significant overheads for the eventual investor.”

Once a property has been acquired, the lister or property owner issues profit-sharing contracts (PSCs) linked to the property, which are then offered to investors via the Urby app.

He adds that investors who enter PSCs do not own equity in the house itself, but are entitled to a share of the profit when the property is sold.

“The PSC represents a monetary interest backed by the property and its sale proceeds. You don’t own legal equity in the house itself — your rights are to a share of the profit via the PSC when the property is sold,” says Ang.

PSCs typically represent 20% to 40% of a property’s value, with the remainder retained by the lister. The app discloses the number of shares issued and the estimated value per share after factoring in relevant costs.

Shares are offered at an initial price of RM10 each. The total number of shares issued per project is calculated by multiplying the lister’s percentage of ownership by the total project cost and dividing that amount by RM10, says Ang.

Total project costs include property acquisition, renovation, legal, tax and other related expenses.

Why are not all the shares listed on Urby? “Previously, we capped listings around 40% because of inventory and risk considerations.  As our user base and AUM have grown significantly over the past few months, we now adjust listing percentages dynamically to ensure there is sufficient stock for investors, especially when new property launches may take time. In some cases, this means listing a higher portion of a house to match demand,” says Ang.

Investors hold the PSCs until the property is sold, at which point net proceeds are distributed proportionately among PSC holders based on the number of shares they hold (see chart below).

Urby also operates an exchange, or secondary market, that allows investors to sell their shares to other users before the underlying property is sold, providing an optional early exit for those with liquidity needs.

“The exchange functions like a typical stock exchange, with a centralised order book and matching done by our system. In addition, the functions of a broker, custodian, clearing house and depository are integrated into the platform. One aspect not currently implemented, however, is that of market makers and liquidity providers,” says Yiin.

Investors are charged a flat 2.5% transaction fee when purchasing shares in the primary market. The platform does not charge additional fees when investors sell shares on the secondary market when a property is sold or repurchased or when funds are withdrawn.

Price movements on Urby are determined by the most recently completed transaction for a property, whether the trade takes place in the primary or secondary market.

PSCs are initially issued at a fixed price of RM10 per share, but prices can change over time based on appreciation and subsequent trades on the platform.

For FastTrack properties, primary-market prices are also adjusted periodically in line with Malaysia’s historical average house price appreciation of 5% per year.

For co-owned homes — now being phased out — prices appreciate at 8% annually under a schedule agreed to by UrbanWave and the resident buyer.

For instance, Rumah Santosha in Seksyen 17, Petaling Jaya, was acquired in May 2024 under the co-owned model and listed at RM10 per share. Under its buyback schedule, the price was set to rise about 8% per year, translating into RM10.80 by May 2025, with a monthly increase of roughly 7.2 sen thereafter.

Investors can also trade PSCs on Urby’s secondary market, where shares are exchanged between users. When a trade occurs, the price of the most recent transaction becomes the reference price displayed across the platform.

The exchange is still at an early stage, though. Prices are not volume-weighted and detailed market data — such as trading volumes, order depth or historical price charts — is not yet fully visible to investors.

“As this is a new asset class and platform, the exchange is not as liquid as existing public markets, and we don’t want to pretend otherwise,” says Yiin.

“Looking ahead, we intend to provide more historical data as the exchange becomes more active and as we gain a better understanding of what data our users want access to.”

Investing with Urby does carry risks, as property values can fluctuate and returns may vary depending on market conditions and the specific properties involved.

Key risks include market demand, price volatility, liquidity, exit uncertainty, interest rates and homeowner default, according to Urby’s website.

Can investors lose their entire investment? “Yes, in theory, it is possible, but it is extremely unlikely. Urby investments are backed by real, physical properties that it owns and holds title to. Because of this, there is always an underlying asset with recoverable value.

“Unlike unsecured or purely financial instruments, Urby’s investments do not go to zero unless the property itself becomes worthless, which is highly improbable in practice,” says Ang.

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