Oman’s first REIT commits to maiden dividend distribution

Oman Real Estate Investment Fund – the first Real Estate Investment Fund (REIF / REIT) in the Sultanate – says it is committed to distributing its maiden dividend in October in line with a pledge that it made as part of its public offering earlier this year.

Aman REIF, which was listed on the Muscat Securities Market (MSM) on March 15, 2020, just before the pandemic began to roil the local economy, had promised to distribute 90 per cent of its net income to investors holding units in the fund at 7 per cent dividend in two semi-annual payments.

Aman REIF remains “committed to its unitholders and will be making the first semi-annual dividend distribution in October 2020”, said Shaikh Mohammed al Kindi, Chairman of the Fund Management Body, in a report accompanying the first unaudited quarterly financial statement of the Fund post its listing on the MSM.

Launched with an issued capital of RO 20 million, Aman REIF became the first listed shariah-compliant REIT in the Sultanate. Subscriptions into the Fund had closed on March 1, 2020 after two sets of extensions to allow for customers to consider investing in the maiden REIT.  Subscriptions covered 50 per cent of the 100 million units offered for public subscription at a total value of RO 10 million. Listed on the MSM on March 15, 2020 at RO 0.102/unit, it closed its first quarter on June 30, 2020 with a net asset value (NAV) per unit of RO 0.102.

In affirming its pledge to make the dividend payment, Al Kindi cited the Fund’s five-year guaranteed lease agreement with the developers of Madinat Sandan, an integrated light industrial city under development at Halban on the outskirts of the capital.  Following its investment in Phase 1 of Madinat Sandan, the Fund now owns 708 units (comprising 269 shops, seven car showrooms and 432 apartments).

“Despite all the headwinds, Aman REIF is well-positioned to tide over the challenges due to its guaranteed five-year lease agreement with Sandan Development whereby Sandan Development has guaranteed lease payments of RO 1.6 million per annum (paid semi-annually) for leasing the 708 units from Aman REIF,” Al Kindi stated.

It’s unveiling last year crystallised longstanding efforts to support the introduction and growth of Real Estate Investment Funds to help create a new source of funding towards investments into Oman’s real estate sector. Those efforts gained momentum when Tanfeedh (The National Programme for Enhancing Economic Diversification) included REITs in its portfolio of quick-win initiatives aimed at fuelling the country’s economic diversification.