Dubai Holding weighs new REIT amid housing boom, report says

Dubai Holding reportedly plans to launch a real estate investment trust (REIT) to capitalise on the growing property market, as the emirate is experiencing an unprecedented surge in demand for its property as thousands of millionaires, financial professionals, and businessmen flock to the UAE.

Sources familiar with the matter told Bloomberg that deliberations are still in progress, and decisions on the vehicle’s size have yet to be finalised. Dubai Holding has lined up banks, including Citigroup, HSBC Holdings and Emirates NBD Capital, for the property trust offering.

The conglomerate, which is one of Dubai’s main investment vehicles, has $72bn (Dhs265bn) more than in assets. Its portfolio includes the luxury hotel chain Jumeirah Group, the property firm Dubai Properties, and the business park operator TECOM Group.

The REIT would offer investors access to a portfolio of prime income-generating properties managed by one of Dubai’s leading developers. This includes several community developments recently acquired by Dubai Holding.

REITs, a subset of property funds, have been a rapidly growing asset class worldwide. Signs of this growth started to emerge in the UAE after the implementation of the legal and regulatory frameworks for their operations and establishment in 2016.

REITs are a source of capital for property developers in the UAE. They help traditional commercial and residential real estate investors benefit from the growth in specialist areas such as education, healthcare, and industrial sectors.

Meanwhile, Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, consolidated the emirate’s major real estate developers under Dubai Holding to “sustain and advance growth” in the city’s property market.

Nakheel and Meydan were merged into Dubai Holding under the leadership of Sheikh Ahmed bin Saeed Al Maktoum.

The merger will combine a complementary suite of services and expertise to diversify Dubai’s economy and maximise its competitiveness in the global marketplace.

Nakheel is best known as the developer of Dubai’s artificial palm-shaped islands, while Meydan owns one of the world’s most opulent horse racecourses.

Earlier this year, Dubai Holding refinanced a Dhs30bn loan to replace older facilities held by Nakheel and Meydan, according to Bloomberg.

Read: Dubai consolidates Nakheel and Meydan under Dubai Holding