Oman plans to launch first REIT fund in April

The funds will allow real estate owners to liquidate their assets, says Fahad Al Ismaili

  
Image used for illustrative purpose only. A house is reflected in floodwaters in Muscat December 21, 2009.

Image used for illustrative purpose only. A house is reflected in floodwaters in Muscat December 21, 2009.

REUTERS/Herbert Fernandes

Muscat: Expatriates and Omanis will now be able to invest in large portfolios such as shopping malls, airports and ports, thanks to the introduction of Real Estate Investment Trust (REIT) funds, according to a board member of Oman Real Estate Association. “One of the major things that happened this year was the final introduction of the law of REIT funds,” said Fahad Al Ismaili.

“These are funds that will be launched in the stock market; so people will be able to buy real estate shares and real estate owners will be able to liquidate their assets,” explained Fahad Al Ismaili, a board member of Oman Real Estate Association.

He added: “The law was issued in January and the first REIT fund will be launched probably in April.”

The real estate association has been pushing for this for the last three years as it believes it will be beneficial to both the owners of these big assets, who can liquidate shares, and to the public, who can’t own huge properties but can have a stake in such portfolios.

“There are a lot of real estate portfolios such as shopping malls airports, ports etc. The owners of big assets can benefit by cashing or liquidating shares in those assets. For example, a citizen cannot buy a mall or an airport, but can buy shares in a mall. So, for an investment as low as OMR1,000, people can own shares in large portfolios,” he said. These funds will not just be applicable to Omanis, but expatriates as well.

“The good thing is that this is also open to expatriates. I think it is a very smart move by the government,” he noted.

Al Ismaili also spoke about Integrated Tourism Complexes and how they could be a huge revenue-driver for Oman. “Many investors are looking into ITCs because having the locals and just GCC nationals as customers is fine, but if you have the whole world as your market it is even better.”

Currently, as per the law, any land which is over 200,000 sq metres is allowed to have ITC status. There are a lot of high net worth individuals who own such land. However, according to Al Ismaili, expatriates need to be allowed to own land outside ITCs too, under specified regulations, in order to make it more flexible and feasible.

“Expatriates should be able to buy property outside ITCs in selected blocks. I think it’s time to open the doors for that,” he said.

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