The speed and quality of the products Inovest is announcing comes in line with its brand undertaking for being a dynamic, innovative, and results-oriented organization. Subject to CBB and other statutory approvals, Inovest will provide the market with the “Inovest Real Estate Investment Trust” (IREIT); the first proper shariah compliant Real Estate Investment Trust of its kind to be launched in the MENA region and incorporating international best practices.
The principle objective of the BD30m IREIT is the acquisition of income generating properties in the GCC which ensure an acceptable risk adjusted return on investment in the form of quarterly profit distribution whilst ensuring reasonable capital appreciation.
Quite uniquely, units of the trust will be traded on the Bahrain Stock Exchange under a new category (subject to final approval of CBB and BSE) and not as a fund or as a real estate company. With a clear understanding of the market and its conditions, the IREIT has a high degree of risk mitigation built into it. The trust will include a diverse range of income yielding residential, commercial, industrial classes of properties, amongst others.
Some of the unique features of the IREIT include its incorporation under Bahrain’s Trust Law whereby a board of Trustees follow international best practices that will ensure protection of unit holders’ interests, distribution of 90% of the income of the trust on a quarterly basis, restrictions on risky developments or off the shelf opportunities, geographical and property diversifications, cap on Ijarah financing, and absolute transparency.
Speaking about the product, Dr. Khalid Abdulla noted, “Capitalizing on significant corrections in real estate sector and chances of further correction down the line, we believe that by the time IREIT deploys its corpus, the markets will provide some of the most exciting entry opportunities to be profited from in the medium to long term.”
Dr. Khalid illustrated that strict criteria and a disciplined approach were used in building the pipeline of properties for the IREIT, which are expected to provide superior risk adjusted returns to investors. Dr. Khalid further clarified,
“a buyer of an IREIT unit is essentially buying a share in a physical asset with long term benefits, the potential for regular income through quarterly distribution of cash profits, as well as appreciation in property values stemming from property acquisition at highly competitive prices. Investing in the trust provides the average investor with the ability to invest in numerous real estate properties, without the normally associated large capital and skill requirements.”
Although the scheme will officially be launched at a later date, after necessary approvals, the IREIT is already generating significant interest from both high net worth individuals and institutions.
Wednesday, April 8- 2009 @ 9:13 UAE local time (GMT+4) Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Mediaquest FZ LLC.