Oman’s maiden REIT casts wider investor net with Islamic structure

Poised to be the first to foray the nascent Omani REIT market, Shariah compliant Aman REIT is aiming
to raise OMR10 million (US$25.91 million) from both retail and wholesale investors based in Oman and abroad once it receives the Capital Market Authority (CMA)’s final greenlight. MARC ROUSSOT has more.

There is a lot of liquidity

to tap from Islamic banks and Takaful insurances

Set up for a corporate investor which will provide half of the vehicle’s OMR20 million (US$51.82 million) capital, Aman REIT will be invested in a single asset

comprising about 705 units located in Muscat Governorate.

Having received initial approval from the CMA in January, the vehicle is expected to be launched by April and is the first of its kind since the introduction of a REIT regulation by the regulator in January 2018, accommodating both conventional and Islamic REITs.

Untested, the regulation revealed itself
to be meeting market needs so far, says Abdul Samad Mohd Al Maskari, CEO of Thara Global Business, which structured the REIT.

“Tanfeed, a national program for enhancing economic diversification, and the CMA have been very supportive. The introduction of REIT in the market is very important for Oman because it adds value to local and international investors as well as the domestic economy,” Abdul shares adding that the challenge was in educating the market and finding the

right asset in a depressed real estate market due to slower growth.

Structured as a Shariah compliant REIT, to broaden the investor base and leverage idle Islamic funds sitting in the Sultanate in particular, Aman REIT is expected to bring a return of above 6% after tax with a potential semi-annual distribution.

“The decision to establish a Shariah compliant vehicle is a strategic one. There is a lot of liquidity to tap from Islamic banks and Takaful insurances for instance,” explains Abdul.

To be listed on the Muscat Securities Exchange, Aman REIT intends to
raise OMR10 million from domestic individuals, corporates and pension funds, among others, as well as foreign investors in general.

To attract funds from abroad, Aman REIT is in discussion with a bank playing the role of a technical partner.