Dubai's Five Holdings debuts the city's first hospitality-focused REIT worth $571 million

Viceroy Dubai Palm Jumeirah, Dubai, United Arab Emirates

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.
"Real estate is a major contributor to the UAE economy and Five Holdings continuously looks at new ways to innovate and ensure that our investors have more avenues to investing their money," Kabir Mulchandani, the chairman and CE of Five Holdings, told TradeArabia. "Owning units in a REIT instead of holding the title to a physical asset means investors will be able to buy and sell at a lower cost and with more flexibility. Investors will be able to monetize faster in a public offer by owning units within a REIT as opposed to a physical asset." 

Virtual Roundtable

Post COVID-19: The New Guest Experience

Join Hotel Management’s Elaine Simon for our latest roundtable—Post COVID-19: The New Guest Experience. The experts on the panel will share how to inspire guest confidence that hotels are safe and clean and how to win back guest business.

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." 

Suggested Articles

Demand came in 67,000 rooms lower during the week ended July 4 than the previous week, according to Jan Freitag, STR’s SVP of lodging insights.

The In-Seat Contactless Platform is meant to give guests touch-free control over food and beverage at hotel restaurants.

As the economy slowly begins to right itself, hotels can look toward an unexpected way to save on operating costs: their trash.