Masdar launches Dh1bn 'green' real estate investment trust

The first-ever sustainable Reit in the UAE will offer investors options to invest in properties with low carbon footprint

Abu Dhabi, United Arab Emirates; January 15, 2020: Masdar, a subsidiary of Mubadala Investment Company and one of the world’s leading renewable energy and sustainable real estate companies, has announced the launch of a sustainable real estate investment trust (REIT) – the first ‘green’ REIT to be introduced in the UAE.

The REIT was launched at Abu Dhabi Sustainability Week (ADSW), by HE Ahmed Ali Al Sayegh, Minister of State and Chairman of Abu Dhabi Global Market (ADGM), Khaled Al Qubaisi, Chief Executive Officer of Aerospace, Renewables & ICT at Mubadala Investment Company, and Mohamed Jameel Al Ramahi, Chief Executive Officer of Masdar. The REIT will have an initial valuation of between AED950 million (US$258.7 million) and AED1 billion. Courtesy Masdar
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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.