This article first appeared in Forum, The Edge Malaysia Weekly on June 22, 2026 - June 28, 2026

There is a category of land in Malaysia that belongs to no developer, cannot be sold and sits outside any private portfolio. These pieces were donated by individuals over generations for the public good under an Islamic charitable endowment called waqf. It is held in perpetual trust. And by most estimates, the overwhelming majority of it is generating no economic return whatsoever.

Malaysia holds an estimated 30,000ha of waqf land. To put that figure in context, it is roughly three times the land area of Putrajaya. Researchers studying these holdings have conservatively valued them at RM4 billion, a figure that dates back to 2015 and almost certainly understates their current worth after a decade of strong property price appreciation. The government’s own Department of Awqaf, Zakat and Hajj (JAWHAR) confirmed in July 2023 that out of 18,402 registered waqf lots nationally, some 3,018, or about one in six, remain unproductive or underdeveloped. Broader estimates place the proportion of undeveloped waqf land area at up to 87% of the total.

Against this backdrop sits a housing crisis that is worsening by the year. The average Malaysian home now costs RM475,126, roughly double the price a decade ago. Household debt has climbed to 84.2% of gross domestic product, with housing loans accounting for 60.5% of all personal borrowing. Close to six in 10 home loan applications from B40 and lower M40 households are rejected outright. Malaysia is not building enough homes: annual supply runs at approximately four units per 1,000 people, less than half the eight to 10 units that development economists recommend for a country at Malaysia’s stage of growth.

We hold land worth billions in public trust, while families are priced out of home ownership. These two realities should be resolving each other. The reason they are not is a legislative gap, not a shortage of land, capital or demand.

Waqf is a form of Islamic charitable endowment. A donor irrevocably transfers land — not to any individual but to the public benefit — in perpetuity. The asset can never be sold or alienated. It is administered typically by the relevant state’s Islamic Religious Council (MAIN), with the obligation that its benefits flow to the community indefinitely.

Two classifications are relevant here. Waqf Am, or general waqf, is land donated for broad public benefit without a prescribed use, giving administrators flexibility to pursue commercially viable development. Waqf Khas, or specific waqf, is donated for a defined purpose: a mosque, a school, a cemetery. Both categories are governed by the same foundational restriction: the land cannot be transferred or sold.

That restriction, which is the very source of waqf’s enduring value, is also what has rendered most of it economically inert under the current legal framework. Permanence of ownership, without a corresponding mechanism to separate and monetise economic rights, has inadvertently locked billions of ringgit in potential value behind an institutional wall.

The financing constraint is straightforward. When a developer builds on land and markets units to buyers, those buyers require mortgage financing. A bank will only extend a loan secured against property it can, in the event of default, recover and liquidate. That is the fundamental logic of collateral.

Waqf land cannot be sold or transferred. A bank holding a charge over waqf-encumbered property would be holding security it could never realistically enforce. The rational response is to decline the financing altogether. Without bank financing, buyers cannot purchase. Without purchasers, developers will not commit to construction. The result is a self-reinforcing cycle of inactivity, and the land sits idle.

The waqf principle is not the obstacle. The absence of a legal mechanism to separate perpetual ownership from transferable economic rights is. The ownership of the land can and should remain with MAIN in perpetuity, as Islamic endowment law requires. What the market needs is a clean, legally recognised structure through which the right to develop, occupy and finance what sits on top of that land can be granted to private parties for a defined, long-term period.

The structural answer does not require novel legal invention. Malaysia has, in various forms and in various states, been operating long-term lease structures over master-held land for years. In parts of Johor, land is held under a single master title while developers build and sell registered leasehold interests, typically 99 years with an optional 30-year extension, to end buyers. The master landowner never alienates the title. Buyers acquire long-term, bankable possession. It functions, in structural terms, almost identically to what a waqf lease framework would require.

In June 2025, the Court of Appeal affirmed that such arrangements are legally valid and consistent with both the National Land Code and the Strata Titles Act. Academic researchers have separately identified at least three distinct lease structures of this kind already operating under existing Malaysian law, none of which required any statutory amendment to implement. The legal architecture is not theoretical. It is already in use in this country today.

The gap is not in the law as it stands. It is in the absence of a clear, nationally standardised provision that extends this same certainty specifically to waqf land across all states, giving commercial lenders the confidence to treat long-term waqf leases as bankable collateral.

On Waqf Am land, the case for affordable residential development is compelling and the arithmetic straightforward.

Land acquisition is consistently the largest single cost in Malaysian property development. Developers must purchase land at prevailing market rates before a single unit can be designed or financed, and that cost is inevitably passed through to buyers. It is a principal reason why new supply clusters at price points beyond the reach of B40 and lower M40 households.

On waqf land, that component is removed entirely. MAIN holds the title. A developer engages on a lease basis, constructs homes and markets 99-year lease interests to buyers at prices that reflect construction economics rather than land acquisition. Buyers receive a bankable, registered interest in their home. MAIN generates long-term, recurring income from lease premiums to reinvest in social programmes. The developer secures a viable project pipeline. The outcome is structurally more affordable housing than any state subsidy programme — which must still account for land cost — can replicate at scale.

The 12th Malaysia Plan set a target of 500,000 affordable homes. As at September 2024, only 443,259 units were completed, under construction or in the planning pipeline, leaving a shortfall of more than 56,000 units with no credible delivery mechanism in sight. Waqf Am land, developed under a standardised lease framework, represents a substantive and underutilised instrument for closing that gap.

On Waqf Khas land, the same lease model enables a fundamentally different institutional outcome: the self-financing religious and community asset.

A mosque built on donated land in the traditional manner carries a permanent funding liability. Construction depends on grants or community contributions. Ongoing maintenance depends on continued goodwill. There is no intrinsic revenue mechanism, and many such facilities are chronically underfunded.

A mixed-use development model changes the equation entirely. The waqf parcel is master planned to position the mosque as the anchor of a broader development incorporating affordable residential units and commercial lots. Revenue from 99-year lease sales on the residential component, combined with recurring commercial rental income, is legally ring-fenced to fund the mosque’s construction and perpetual operating costs. The institution becomes self-sustaining from the day it opens.

This is not a contemporary invention. It has been the organising principle of Islamic urban development for centuries. The Suleimaniye complex in Istanbul, Türkiye, and Al-Azhar in Cairo, Egypt, both established under Ottoman waqf structures, were funded precisely through the commercial income of adjacent bazaars, hammams and residential endowments. Al-Azhar University, one of the oldest continuously operating universities in the world, was built and sustained on waqf revenues. The logic is proven across centuries and geographies. What is proposed here is simply the application of that logic through 21st-century financial and legal instruments.

For a contemporary model of what professional waqf asset management can achieve, Malaysia needs look no further than Singapore.

Warees Investments, the wholly-owned property arm of Singapore’s Islamic Religious Council (MUIS), administers more than 150 wakaf properties across the island. It operates with the discipline and methodology of a sophisticated private real estate firm, deploying feasibility analysis, structured funding models and active asset enhancement strategies. In one well-documented case, a wakaf property with a book value of S$800,000 appreciated to over S$71 million within a decade through active development. Warees Investments also pioneered Singapore’s first Musyarakah Bond to finance a waqf property redevelopment, demonstrating that Islamic capital markets can be integrated effectively into endowment management.

Malaysia holds waqf land far in excess of Singapore’s endowment portfolio by area. The difference is not in the asset base. It is in the legislative and institutional framework that governs what managers are permitted to do with it. MUIS operates under clear statutory authority. Warees Investments can borrow, develop and transact with the certainty that attracts institutional partners and commercial lenders. That certainty is buildable here. It requires amending the National Land Code.

The policy intervention required here is narrow and well-defined. It does not call for a new statutory body, a new fund or a new government expenditure programme.

It calls for parliament to amend the National Land Code to incorporate a clear, standardised framework for waqf lease schemes: one that authorises MAIN bodies to grant long-term registered leases over waqf land to developers and end buyers, defines how those leases may function as collateral for institutional financing, and provides every counterparty in the transaction with the legal certainty required to commit capital and proceed with confidence.

The judicial foundation is in place: the Court of Appeal confirmed in June 2025 that master title lease arrangements of this nature are consistent with existing Malaysian law. The commercial evidence is in place: institutional developers and buyers have demonstrated repeatedly that they will participate when tenure is clear and financing is accessible. The international evidence is in place: Singapore’s Warees Investments demonstrates the asset appreciation and social returns available when professional endowment management is backed by enabling legislation. And the academic record confirms that variants of this lease structure are already operating legally in Malaysia today, without a single line of statute having been changed.

What remains absent is the political commitment to consolidate these precedents into a nationally applicable legislative standard.

Malaysia is not short of waqf land. It is not short of housing demand. It is not short of developers who would build, or families who would buy, if the legal infrastructure permitted them to transact with confidence. The constraint is legislative, not material.

Leaving 87% of waqf land idle is not an expression of religious fidelity. It is a policy failure, one that is costing ordinary Malaysians their best remaining pathway to home ownership, and costing the Muslim community billions in unrealised social value that was always intended to serve them.

The land exists. The legal template exists. The commercial and institutional proof points exist. It is time for the National Land Code to catch up.

Idzham Mohd Hashim is a real estate practitioner with nearly two decades of industry experience, specialising in large-scale development, private equity and real estate finance. He was formerly on the Ministry of Housing and Local Government’s Panel of Experts and is currently completing a master of studies in real estate at the University of Cambridge.

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