Real estate investment trusts (Reits) are slowly gaining a foothold in the UAE property market. The investment vehicle allows individual investors to access real estate portfolios without owning underlying assets. There are currently only two listed real estate investment trusts in the UAE - Emirates Reit and ENBD Reit. Some institutions have been setting up unlisted Reits as well.
Equitativa, the company behind Emirates Reit, launched the first Shariah-compliant residential Reit with a seed portfolio of Dh418 million in February 2017. The founding shareholders are Al Hamra Real Estate Development and National Bonds. The Reit includes 371 residential units in Ras Al Khaimah's Al Hamra Village and 112 units in Dubai's Motor City.
Reits issue securities in the form of shares that invest in income-generating real estate. This could reduce the risk associated with owning a property and lower the cost of entry into real estate. Real estate investment trusts could help investors to diversify their portfolios and benefit from long-term capital appreciation. Reits could be an attractive prospect for retail investors seeking to enter the UAE property market.