GII Islamic REIT (CEIC) Plc

General Questions

What is a REIT?

A REIT (Real Estate Investment Trust) is a collective investment vehicle in a form of a trust or a company that invests primarily in income-generating real estate. A REIT generates its income from the rental of leased properties, and after paying all operating expenses the REIT distributes the majority of its profits to its shareholders. 

Why Invest in a REIT?

REIT is an investment backed by tangible real estate assets and distributes most of its income as dividends. REITs are considered a liquid format for owning a portfolio of real estate assets with competitive returns and the potential for long-term capital appreciation.

Can the REIT own and manage any type of property?

Yes. REITs can own and manage any type of real estate property including residential, commercial, health care and life science facilities, hotels, and industrial assets.  Additionally, REITs can also invest in global real estate markets as permitted by their regulators.

What is the difference between REIT shares (Units) and Normal Equity Shares?

REIT Shares are categorized between bond and equity shares of a company.  Upon listing, it becomes tradeable just like any other normal share.

REIT unit’s price is less volatile as compared to Equity shares due to stable net income from long leases versus being dependent on uncertain net profit.

REIT vs Property:  Why should you invest in a REIT instead of buying Property directly?     

• Flexibility: REIT allows investors to invest any amount into real estate assets.
• Diversification & Risk Mitigation: In a REIT, the underlying portfolio consists of baskets of properties with diverse income streams as compared to direct investment in one property with a concentration of tenant and asset risk in one property.
• Liquidity: Upon listing, trading in shares of the REIT is far easier and faster than selling a physical real estate asset. Moreover, it enables the investor to realize part of his investment whilst maintaining exposure for the residual amount.
• Cost Efficiencies: As REIT manages a portfolio of properties, thus negotiations for better pricing from external service providers (ex. Valuation companies, facilities management companies, brokers etc) are successfully achieved in comparison to a single property owner. The REIT also targets to strategically partner with key and strong service providers to achieve the highest quality for the best price. 
• Professional Management: REITs are managed by professional investment managers thereby ensuring higher efficiency, better corporate governance and higher returns on investment for the investors.

GII REIT Questions

Why invest in GII REIT as compared to other listed REITs in UAE?

• The current market conditions are a perfect time to buy properties, thus benefiting from the lower market prices with a potential for future upside.
• The Fund Manager (GII Capital) is 100% owned by GII Holding LLC, a sister company of Gulf Islamic Investments LLC (“GII LLC”), an ESCA-regulated entity having a positive track record of investing and managing income-generating real estate properties internationally, focused strengths on the UAE, UK, US and Germany.
• Most of the seed assets in GII REIT are acquired in the form of in-kind contributions from investors and reputed real estate developers thereby ensuring that the REIT has key long-term partners as its initial shareholders.
• GII REIT intends to distribute dividends every month as against quarterly or half-yearly basis by other REITs.
• GII REIT intends to list on Nasdaq Dubai and other major stock exchanges to provide access to global investors and to ensure better liquidity and price discovery.

When and why GII REIT intends to get listed on Nasdaq Dubai?

Subject to market conditions and satisfying all regulatory approvals, GII intends to list on Nasdaq Dubai as a global platform that allows international and local investors to trade GII REIT shares.

Why invest in GII REIT pre-listing?

• Issuance of shares at a Discount: The investors participating in GII REIT before listing shall be issued shares of the REIT at an issue price that is at a discount to the current net asset value per share of the Fund.
• Listing Gains: The investors investing before detailing can likely make some capital gain upon listing on the stock exchange.

What is the risk of investing in GII REIT?

The risk of investing in GII REIT is the risk associated with local & regional economic outlook, which may have a downward impact on property prices and rental income.

Can GII REIT invest outside UAE and whether it can invest in development projects?

• GII REIT can invest up to 30% of its total assets into income-generating properties outside UAE mainly in the developed markets.
• GII REIT may invest up to 30% of its assets in property developments.