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EDITOR IN CHIEF- ABDULLAH BIN SALIM AL SHUEILI

Oman’s first Real Estate Investment Fund soon

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MUSCAT, JUNE 4 -


Oman’s first Real Estate Investment Trust (REIT) is likely to make its debut in the coming months, according to a key official of the Capital Market Authority (CMA) — the market regulator for this newly authorised vehicle for investment in the real estate sector.


Mohammed Said al Abri, Vice- President of the Capital Market Sector, said that market interest in the launch of REITs — also known as Real Estate Investment Funds (REIFs) — has been burgeoning since January this year, when the CMA endorsed a regulatory framework governing the roll-out and management of these instruments in the domestic market.


“There have been a lot of inquiries from market participants, which signals great interest in this instrument,” said Al Abri. “We have three applications on our desk so far, but these are more exploratory in nature. We hope to see, within the next one or two months, the launch or incorporation of the first real estate fund in the country,” he added during a recent panel discussion on the theme.


The market’s ostensible failure to offer a single REIT despite the passage of four months since the approval of the regulatory framework is understandable, according to Al Abri. REITs, he explained, represent a generally complex instrument particularly in a new market without any precedents to serve as templates. However, market appetite for REITs as instruments for driving investment in the property sector remains promising, the official noted.


Importantly, regulations adopted by the CMA allow for the incorporation of both conventional and sharia-compliant real estate investment funds, said Al Abri. “The minimum capital for any real estate investment fund should be not less than RO 10 million — which allows for the fund to invest in reasonably sized properties while generating more revenue for potential investors. The regulations have also been designed to support the establishment of funds that appeal to foreign investors. There is no restriction on foreign ownership of these funds. They can acquire any percentage — because there is a clear distinction between ownership of units in the trust and direct ownership of the property per se,” he explained.


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