GCC’s first monthly dividends REIT launches into potential ‘billion dollar market’

Gulf Islamic Investments (GII) has announced the official launch of its Shariah compliant real estate investment trust (REIT), under the name of “GII Islamic REIT (CEIC) Ltd” into what has been described by one of the founders as a marketplace worth ‘billions of dollars’.

Registered in Dubai International Financial Centre and managed by Gulf Islamic Investments (DIFC) Limited, both the REIT and the manager are regulated by the Dubai Financial Services Authority (DFSA), the company said in a statement announcing the launch.

CEO of GII, Mohammed Al-Hassan, said: “Our sole focus is to maximize annual dividends for the investors and pay these on a monthly basis, once the REIT has on-boarded enough assets.

He said that the REIT expects to quickly receive US$200m of assets, negotiations for which are nearing conclusion, and another US$300m-US$500m prior to the IPO of the REIT, targeted for second quarter 2018. The REIT will then be listed on Nasdaq Dubai, once necessary approvals are in place.

“We have also kept flexibility to invest up to 40% of the REIT assets in UK, US or Germany, if the investment case is strong enough, but for now, almost all investments targeted will be UAE focused,” Al-Hassan added.

Monthly dividends

Pankaj Gupta, CEO-UAE GII group and Executive Director of GII Islamic REIT, said: “The monthly dividends concept is widely prevalent in developed markets and there is no reason why it should not flourish in GCC as well.

“The REIT collects its rental income 3 months in advance in most cases so there is no reason to sit on the cash for 3 months, which is why we have decided to pay out dividends monthly.”

Pankaj added that the company is keen to uphold the values of Islamic Investing “at all times”, and to come up with products and ideas that “differentiate us from rest of the market”.

‘Billions of dollars’

Omar Mirza, the CEO of fund manager of GII Islamic REIT (CEIC) Ltd, reiterated the need for monthly dividend products in the GCC stating that there are billions of dollars sitting in current accounts of Islamic Banks in GCC, for the simple reason investors can’t find decent enough Islamic monthly dividend products to invest in.

“If they do come across some monthly dividend products, they tend to be more volatile in nature and built around global equities or fixed income instruments, that many GCC investors are not quite comfortable with,” he said.

“With Real Estate, everyone understands it easily and knows there is some tangible, easily identifiable asset they are investing in, without any complex instruments, such as derivatives etc being employed in managing of the strategy.

Gulf Islamic Investments LLC is a UAE-based financial services company that manages US$2.5bn in assets and securing US$5.5bn in debt.

Gary Robinson
Head of Video and Ezines at Open Door Media Publishing. Deputy Editor, International Investment. An experienced journalist and filmmaker with more than 20 years' financial services experience, both as journalist and originally as a fully qualified IFA, Gary works across both International Investment and InvestmentEurope titles. Previous video production credits include projects on BBC, C4 and SKY.

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