Tuesday 1 January 2019

Gulf's REITs bring IPO receipts, but investor returns not so neat | ZAWYA MENA Edition

Gulf's REITs bring IPO receipts, but investor returns not so neat | ZAWYA MENA Edition:

The Gulf’s REITs sector has tremendous potential but must overcome ambiguous regulations, a shortage of suitable property and downbeat investor sentiment in order to expand as an asset class.

Dubai was the first Gulf jurisdiction to permit Real Estate Investment Trusts (REITs), which own and manage real estate portfolios, introducing a REITs law in 2006, while Abu Dhabi, Saudi Arabia, Oman and Bahrain did likewise from 2015 onwards.

Yet REITs have gained little traction, aside from in Saudi Arabia, where a flurry of listings on the kingdom’s bourse brought windfalls for REIT owners and many were massively oversubscribed, before investors began to question their asset quality.

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