Real Estate Investment Trusts Still Smart Play
Enhancing Returns, Reducing Volatility, Hedging Inflation, Complying with Shariah Law Seen Among Benefits, Says New BUiD Research
Enhancing returns, reducing volatility, hedging inflation, and complying with Shariah law are among the many benefits associated with unleveraged real estate investment trusts (REITs), according to new research conducted at The British University in Dubai (BUiD).
REITs are commonly regarded as close-ended companies or trusts that hold, manage and maintain real estate for investment purposes which is leased to tenants.
Based upon analysis of property price data provided by two of the city’s leading property management firms – Colliers and Landmark Properties – a BUiD graduate student has found that the performance of REITs outperformed equities and bond, and that the inclusion of unleveraged REITs, as an asset class in a portfolio, provides increased returns while reducing overall risk.
“It gives me great pleasure to see such an accomplishment in research-based study. The applications of these findings can have a strong effect on local business practice and investment,” said Dr. Abdullah Alshamsi, Vice-Chancellor, The British University in Dubai.
Using knowledge gained through research, data and methodology, as well as business courses at BUiD, Danny Di Nardo’s findings outlined the advantages and growing popularity of REITs in Dubai.
“This REIT research is just the type of graduate-level research we encourage at BUiD – thorough, well-documented, and, above all else, immediately applicable to challenges faced in today’s business world,” said Di Nardo’s supervisor, Dr. John A Anderson, Senior Lecturer for Finance and Banking, Faculty of Business, The British University in Dubai.
Danny Di Nardo, who recently completed his dissertation on the Diversification Benefits of REITs in Dubai, will be receiving his Masters degree in Finance and Banking at BUiD. Di Nardo will also be speaking at the 7th NTU International Conference on Economics, Finance and Accounting (IEFA) in Taiwan.
“Based on the research presented, unleveraged REITs remain a smart tool for investors in the region, particularly since it complies with Shariah law,” said Danny Di Nardo.
“Additionally, the completion of my dissertation along with the financial infrastructure, such as the DIFC, and well experienced professionals in both the real estate and banking sectors provides for the ability to establish Dubai as a major REIT hub for the Middle East and attract investors worldwide.” added Di Nardo.
