Dubai-based developer SKAI Holdings – now rebranded as Five Holdings – has launched a Dhs2.1bn real estate investment trust (REIT) that will focus on the hospitality industry.
The REIT will be regulated by the Abu Dhabi Global Market (ADGM) and Financial Services Regulatory Authority (FSRA), and is the region’s first hospitality focused REIT and the largest to date, a statement said.
It will include Five Holdings’ Dhs4.3bn Viceroy Dubai Palm Jumeirah, and all future projects subject to compliance with regulatory requirements. That includes the developer’s Dhs1.28bn Viceroy Dubai Jumeirah Village – which is now 40 per cent complete and scheduled to open in Q3 2018.
Additional projects will be added as they are announced or acquired, the statement said.
REITs issue securities in the form of shares that invest in income-generating real estate such as mortgages and may be traded like a stock when offered to the public.
“Real estate is major contributor to the UAE economy,” said Kabir Mulchandani, chairman and CEO of Five Holdings.
“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,” he added.
Five Holdings confirmed that around 60 investors have so far committed to contribute their property into the REIT.
“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,” said Mulchandani.
SKAI also said that the rebrand to Five Holdings was aimed at reflecting the company’s ambition to grow its current property portfolio of $2bn.