Dubai-based real estate development and hospitality group Five Holdings—formerly Skai Holdings—has established a $571-million real estate investment trust—the region's first REIT completely focused on hospitality.
According to the TradeArabia, the REIT will include Five Holdings' $1.7-billion Viceroy Dubai Palm Jumeirah and its $349-million Viceroy Dubai Jumeirah Village, which is now 40 percent complete and opening mid-2018. Properties from around 60 investors will also be included, and additional projects will be added as the group announces or purchases them. All future projects are subject to compliance with regulatory requirements. Abu Dhabi Global Market and the Financial Services Regulatory Authority will regulate the trust.
The company's new name and philosophy reportedly derives from the five elements and reflects the firm's continued ambition to increase its current $2-billion property inventory.
REITs issue securities as shares that invest in income-generating real estate, such as mortgages. These may be traded like a stock when offered to the public. They also allow investors to have an underlying stake in real estate. In turn, they allow investors to diversify their exposures and investments and to benefit from long-term capital appreciation. “REITs offer a compelling investment vehicle where risk is spread across a number of real estate propositions under one portfolio," Mulchandani added. "This is the beginning of a wave, and I envision the UAE REIT industry to be hundreds of billions of dirhams over the next 10 years."