Real Estate Investment Trusts (REIT) are set to dominate the programme on day two of the Real Estate Finance & Investment Conference at Cityscape Abu Dhabi, which is due to take place at the Abu Dhabi National Exhibition Centre (ADNEC) on 8-10 May 2007. During the three-day conference, key presentations will be made to examine the regional potential and benefits of REITs, the mechanics, structure and the regulatory conditions required. Legislative changes over the last five years have led to the introduction of REITs in a number of key global markets and according to Luxembourg-based Schroder Investment Management, has created market capitalisation valued in excess of US$ 500 billion.
Stephen Atkinson, Managing Director of Arabian Real Estate Investment Trust (AREIT), said, “The DFSA was the first regional exchange to issue enabling regulations for REITs. It is expected that other regional exchanges will also issue such regulations in the short term. Considering the significant ‘local’ and international interest to invest in the Middle East and such entities, it is only a matter of time before there are a number of REITs listed on the DIFX and other suitable exchanges.”
REITs develop, manage and sell real estate assets which give investors access to a professionally-managed portfolio of real estate properties. Although generally restricted to realising property rental income, the major advantage is its liquidity. Compared to traditional private real estate ownership which is sometimes difficult to liquidate, REIT investments are primarily traded on major exchanges, making it easier to buy and sell REIT assets/shares than to buy and sell properties in private markets.
Other key advantages are that an REIT company must distribute at least 90 per cent of its net income to shareholders annually in the form of dividends and they have a low correlation of their value to that of other financial assets. In addition they require no minimum investment and investors are usually provided with attractive returns through stable current income.
Given this potential, understanding the mechanics and risks of REITs will be an increasingly important role for many regional real estate investment professionals. Four dedicated sessions will examine the benefits and regional potential for REITs, current investment opportunities, global trends and the structure and regulatory conditions required for a successful REIT market.
An unrivalled line-up of expert speakers has been recruited to present the case for REITs, such as, Jason B. Kern, Executive Director, Real Estate Investment Banking, J.P. Morgan Securities (Asia Pacific) Ltd, Hong Kong; Andrew Chambers, Managing Director of Dubai-based Asteco Property Management; Denis Sabourin, Managing Director, of State Street Bank and Trust Company, UAE and Simon Gray, Director of Supervision, at Dubai Financial Service Authority (DFSA).
