Dubai’s first industrial and commercial REIT launches
The family behind the successful Palmon Group, one of UAE’s home-grown conglomerates has announced the launch of its private real estate investment trust (REIT) Manrre – a Property Fund and a Real Estate Investment Trust for qualified investors. Established in compliance with the laws and rules of the Dubai Financial Services Authority (DFSA), Manrre aims to raise about AED 330M as part of its strategy to acquire additional rent-yielding commercial assets.
Manrre’s stable, low-risk strategy involves focusing on industrial, logistics and commercial assets, Manrre’s primary target market is the UAE. Its core investment objectives include generating a regular source of income for investors by way of distributing quarterly dividends and targeting 8 percent annualized return.
The challenge for investors is the inability to access high-value real estate which generates better returns as it typically requires a larger ticket size. By pooling resources with those of others, qualified investors are able to access these larger assets that might otherwise remain out of reach with a minimum subscription starting at a USD 500,000.
Manrre also accepts investments in-kind of those assets which fit into the fund’s investment strategy, and which will be accepted into the fund in exchange for shares. This will allow in-kind investors enjoy added diversification and returns without the operational obligations of property management and maintenance.
“Our vision for Manrre is to list the fund on the stock exchange within the next two years to generate maximum return for our investors. As we get closer to 2020, we believe this is the right time to launch Manrre,” said Mr. Manohar Lahori, Chairman of Palmon Group.
Manrre currently holds a portfolio of 19 real estate properties worth AED 215,000,000 across the UAE and its portfolio consists of 625 investment in logistics assets, 23% in industrial assets, 8% in office assets and 7 percent in staff accommodation.
“Since establishing our roots in 1985 in the UAE, and over the last 33 years we’ve been an investor in industrial and commercial real estate. We leverage the global, regional knowledge and expertise of the team, which today underpins Manrre. With structured, formal governance and an external investment committee validating every investment, Manrre achieves the ideal balance between personal insight and objective scrutiny and controls,” added Mr. Manohar Lahori.
Globally, REITs are a growing segment of the real estate market with an estimated market capitalization of around $2.1 trillion, according to Cohen & Steers.
Asia is the region with the largest growth in REITs in recent years with Singapore and Japan being the biggest markets.
Manohar Lahori, Chairman of Palmon Group