FIVE Holdings, the Dubai-based real estate development and hospitality group previously known as SKAI Holdings, has launched a AED 2.10bn ($570m) real estate investment trust (REIT), a first for the region.
The REIT will include the company’s AED 4.3bn ($1.17bn) Viceroy Dubai Palm Jumeirah, and all future projects subject to compliance with regulatory requirements. It will be regulated by the Abu Dhabi Global Market (ADGM) and Financial Services Regulatory Authority (FSRA).
REITs issue securities in the form of shares that invest in income generating real estate including mortgages and may be traded like a stock when offered to the public.
FIVE Holdings also unveiled its new corporate identity for the first time today. Previously known as SKAI Holdings, the firms new name and philosophy is based on the five elements and reflects the groups continued ambition to grow its current property portfolio of $2bn.
Real estate is major contributor to the UAE economy and FIVE Holdings continuously looks at new ways to innovate and ensure that our investors have more avenues to investing their money. Owning units in a REIT instead of holding the title to a physical asset means investors will be able to buy and sell at a lower cost and with more flexibility. Investors will be able to monetise faster in a public offer by owning units within a REIT as opposed to a physical asset, said Kabir Mulchandani, Chairman & CEO, FIVE Holdings.
REITs offer a compelling investment vehicle where risk is spread across a number of real estate propositions under one portfolio. This is the beginning of a wave and I envision the UAE REIT industry to be hundreds of billions of Dirhams over the next 10 years, he added.
In addition to FIVE Holdings Viceroy Dubai Palm Jumeirah, FIVE REIT is expected to include its AED 1.28bn Viceroy Dubai Jumeirah Village, which is now 40 percent complete and on track to open in Q3 of 2018. Additional projects will be added as they are announced or acquired.