Gulf Islamic Investments (GII) announces the upcoming formation and launch of a Shariah-compliant real estate investment trust (REIT), under the name of “GII Islamic REIT Ltd”, Reuters reports.
GII plans to register the REIT in the Dubai International Financial Center (DIFC), and it is expected that the REIT will be launched during the holy month of Ramadhan.
Both the REIT and the manager will be regulated by the Dubai Financial Services Authority (DFSA), subject to all regulatory approvals being in place.
CO-CEO of GII, Mohammed al Hassan, says, “GII Islamic REIT will be the first in the GCC that starts giving out monthly dividends. 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% to 10% or higher, on an underlying asset class (real estate) that the investors are quite familiar with.”
GII has already received commitments from its investor group who are willing to seed the GII REIT strategy with some AED 500 mn of their rent generating existing properties.
Further investments worth AED 500 mn into Shariah compliant hotels and office buildings are under discussion and are 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.