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Bahrain Bourse Creates REITs Market

March 2016

March 15, 2016 | 15:35 | Dubai

The Chairman of Bahrain Bourse (BHB), Yusuf Abdulla Humood, has issued a resolution in respect of the creation of the Real Estate Investment Trusts (REITs) Market at Bahrain Bourse. “In this market, REITs licensed by the Central Bank of Bahrain (CBB) can be listed and traded by investors in the secondary market in accordance to the general trading guidelines in BHB’s Rulebook. The details of the market and the trading mechanism of REITs will be announced later on by the Chief Executive Officer of the Bourse,” a statement by BHB said.

A REIT is similar to a mutual fund or collective investment schemes. It can be defined as a fund that is into buying/selling, developing and managing, properties ranging from housing developments, office buildings, shopping malls, or even a skyscraper. A REIT gives investors the opportunity to invest in real estate not directly, but by pooling their money into a professionally managed property fund that invests in income-producing real estate thus providing stable rental income or profits from the property sale, and distributing this as dividends to investors. REITs belong to an asset class that offer total return on investments. They generally provide high dividends plus the potential for long-term capital appreciation. In the GCC however, REITs still remain a fledgling alternative asset class. 2014 saw the first listing of a REIT on an exchange in the GCC, when trading began in April that year in Emirates REIT on NASDAQ Dubai following its initial public offering (IPO).

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