Abu Dhabi-based clean energy firm Masdar is introducing the UAE’s first “green” real estate investment trust (Reit) with a value of up to Dh1 billion, giving investors a chance to invest in a portfolio of income-yielding properties with lower carbon footprint.
Masdar, a subsidiary of Abu Dhabi’s strategic investment arm Mubadala Investment Company, launched the Reit during the Abu Dhabi Sustainability Week. The investment vehicle will initially include four commercial properties within Masdar City, the sustainable urban community in Abu Dhabi that is focused on low-carbon urban development, the company said in a statement on Wednesday.
The private Reit will be launched as a ‘Qualified Investor Fund’, open to market counterparties and select clients through private placement. The properties cover a net leasable area of 57,493 square metres, and they have all achieved a rating of 3 Pearls or above on Abu Dhabi’s Estidama Pearl Building Rating System, Masdar said.
Unlike listed Reits, private real estate trusts do not trade on a stock exchange. Listed Reits own income-producing commercial real estate and are legally obliged to distribute most of their income, usually at least 80 per cent, as dividends to shareholders. Reits, as investment vehicles, are becoming increasingly popular in the Gulf as investors prefer a basket of real estate assets as opposed to standalone buildings.
Masdar’s Reit will be set up at Abu Dhabi Global Market.
“This Reit is a significant milestone for green investment in the region, and demonstrates Masdar’s leadership in sustainable development,” Mohamed Jameel Al Ramahi, chief executive of Masdar, said. “This is the first venture of its kind here, and offers investors an attractive option to invest in sustainable income-generating real-estate assets that are helping to contribute to a greater future for all.”
Investors are increasingly looking for “responsible investments” and the new Reit will contribute to the development and strength of Abu Dhabi’s real-estate sector, he said. It will bring in “greater investment from domestic and international investors” looking to invest responsibility, he added.