Dubai: Gulf Islamic Investments is setting up a Sharia-compliant real estate investment trust (Reit) that is to be registered at the Dubai International Financial Centre (DIFC). The launch is said to be imminent, and both the Reit and the manager will be regulated by the Dubai Financial Services Authority, subject to regulatory approvals being in place.
“GII Islamic Reit will be the first in GCC that starts giving out monthly dividends,” said Mohammad Al Hassan, Co-CEO of GII. “We have identified a clear gap in the market, whereby smaller investors in particular, do not have enough monthly income generating investment options and bank deposits have not been paying much for many years now.
“GII Islamic Reit will therefore, help bridge this gap, by targeting annual dividend payments between 7-10 per cent per annum or higher, on an underlying asset class [real estate] that the investors are quite familiar with.”
GII has received commitments from investors willing to seed the Reit’s strategy, with some Dh500 million being for rent-generating existing properties. A further Dh500 million will go into Sharia-compliant hotels and office buildings, and discussions and expected to conclude in the next few weeks.
GII expects to raise further assets, in cash or kind from other institutional and sophisticated investors, before it goes for IPO in next 12 to 18 months’ time, it said in a statement.
According to Omar Mirza, CEO-designate of GII Islamic Reit mentioned, “Reits reflect [a] maturing of real estate markets, wherever they are present, and help reduce market volatility by institutionalising real estate investing. Reits in the GCC region are still quite new and there is ample room for even 20 to 30 more Reits to set up in different segments of the real estate pie.”
