Out of the box

Real estate investment funds.. more listings

Ismail Al Hammadi

February 15 2022

According to recent studies on the global real estate market, there are about 1250 real estate investment funds in the world, of which 26 are Gulf funds, four of them are in the UAE, and 17 are in Saudi Arabia.

Emirates REIT is the largest investment fund, compliant with Islamic law, and is listed on Nasdaq Dubai.

Investment funds were among the successful investment tools that contributed to revitalizing the performance of the real estate market, and providing the opportunity for small investors to experience an investment experience in the UAE real estate sector.

As for the advantages of investment funds, they do not stop at this point, as they focus on high-income real estate that guarantees a return to shareholders, and it is of limited risk to investors, compared to direct real estate investment most of the time.

The UAE real estate sector is witnessing a double activity during the years 2021 and 2022, and is expected to continue during the next year and beyond. The sector is also witnessing a quality of distinctive projects that did not exist before, as the developers’ interest today is focused more on the quality of life in housing, and on high-end projects. Which is considered the backbone of investment funds, and this will give them other advantages.

Therefore, given the importance and weight of the UAE real estate sector, and the importance of investment funds in raising the level of its activity, it may be time to think about including more traded real estate investment funds, while reconsidering the percentage of profits distributed to shareholders, as it should not be less than 90%, and It is applied internationally, and may reach 100% in some of them, depending on the level of market performance.

More listings will provide an opportunity for more investors to enter the real estate sector from this door, and will stimulate the sector to provide more effective investment products that benefit the shareholders and the sector together.

So far, real estate investment funds in the local sector have gained a reputation and performance that is attested to by their clear work policy, and their flexible systems that facilitate dealing through them, with the low cost of investing in them, which makes the UAE real estate market capable of absorbing more funds in the future, and attracting all categories Investors on the one hand, and raising the value of the capital of basic assets, and the volume of cash flows on the other hand, as it is one of the sources of real estate financing and fixed income for investors, as well as being one of the mechanisms of investment diversification in the real estate sector.

Also, working on developing new legislation for new listings, and attracting foreign investment funds to support their entry into the real estate sector, will have a positive impact on its future course.

• There are 26 real estate investment funds in the Gulf, 4 of which are in the UAE.

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