The real estate industry is following a new strategy which is Real Estate Investment Trusts (REITs) and investors are keen to understand more about it as per the meeting held with the regional investors and stakeholders. We usually hear a lot of questions and confusions regarding REITs that whether REITs will be accepted in UAE market and it will bring higher revenue and income soon or no. in the following article, we will be answering these questions at best by the market view and thinking.
The investors of UAE especially in Dubai has realized the importance of REit benefits and included in the portfolio based on its importance. The GCC market is not mature like other markets and our vase low, but still, the Reits benefits have got fantastic understanding and acceptance in the region.
There is of great interest and demand for the real estate mutual fund investment mean by keeping in mind the barometer reading of the REITs public listed companies number. The number of the products is quite limited till now, but the growth can be seen from the positive investor’s outlooks.
The Reits is still emerging but its compliance has come with tailored made fund portfolios for the investors especially the locals as per their need. It is obvious in the assets new mix by adding fund to the required portfolios.
The regional Reits is expanding and adding new sectors such as healthcare and education which was only restricted to the residential and office plans. Thus investors whether local or international have options of choosing from great product diversity.
We can realize the importance by the step taken by ENBD Reit in buying a Dubai remraam community new school of worth Dh55 million. The student housing capacity is also acquired with the funds for Dh129 m on May 2017.
The emirate REITs which are the first REIT of UAE is done with the three deals of school in last years. The British Columbia Canadian School which was leaseback and sale contract located in the Dubai Investments Park is the latest proof.
Due to the rising demand for the schools in UAE, the educational sector serves as the great news for Reits. More than 1000 schools are opening up in upcoming 5 years in Abu Dhabi, Dubai, Jeddah, Cairo, and Riyadh as per the report of the industry and private sector will supply 350 of them.
The untapped market is health care which is due to the high investment capital associated with either the medical instruments or the constructing a hospital by buying the property. The Reits can expect great returns and profits in the UAE health sector with the growth rate of 60% in 2021 and UAE agenda of 2021 vision to make healthcare a world class standard, click here to get the detail.
Moreover, the fund manager can identify high assets classes which are less impacted by the market and REITs can do diversification and expansion in that. This is the untapped opportunity and REITs can cash on that. The recent example is of five holding, Reit hospitality of worth Dh 2.1 billion which is huge and new in the UAE.
We can expect positive outlook in future as the UAE real estate industry is growing and becoming mature with time. The Reit has been accepted in the region by the investors for providing returns with less risk and it will grow further in future with the Dubai expo 2020, local benefits and strategic location of UAE.