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UAE's Five Holdings unveils $570m hospitality-focused REIT

The REIT – launched by the real estate and hospitality company formerly known as SKAI Holdings – is the region's largest, and the first to focus on the hospitality sector

Five Holdings' REIT includes the Viceroy Palm Jumeirah Dubai.
Five Holdings' REIT includes the Viceroy Palm Jumeirah Dubai.

Dubai-based Five Holdings has launched a real estate investment trust (REIT) worth $570m (AED2.10bn), it was announced. 

The REIT – launched by the real estate and hospitality company formerly known as SKAI Holdings – is the region's largest, and the first to focus on the hospitality sector.  

Abu Dhabi Global Market (ADGM) and Financial Services Regulatory Authority (FSRA) will regulate the REIT, which includes Five Holdings' $1.17bn (AED4.3bn) Viceroy Palm Jumeirah Dubai, and "all future projects subject to compliance with regulatory requirements". 

Five REIT is also expected to include the firm's $348.4m (AED1.28bn) Viceroy Dubai Jumeirah Village, which is now 40% complete and on track to open in Q3 2018.

Additional projects will be added as they are announced or acquired, a company statement revealed. 

The statement continued: "REITs issue securities in the form of shares, which invest in income-generating real estate – including mortgages – and may be traded like a stock when offered to the public.

"Investors of REITs are offered an underlying stake in real estate, which allows them to diversify their exposures and investments [and] benefit from long-term capital appreciation." 

Remarking on the launch of Five REIT, Kabir Mulchandani, chairman and CEO of Five Holdings, said the move is part of the firm's initiative to "ensure that our investors have more avenues to investing their money". 

He continued: "Owning units in a REIT instead of holding the title to a physical asset means investors will be able to buy and sell at a lower cost, and with more flexibility.

"Investors will be able to monetise faster in a public offer by owning units within a REIT as opposed to a physical asset," Mulchandani continued. 

He added: "REITs offer a compelling investment vehicle where risk is spread across a number of real estate propositions under one portfolio.

"This is the beginning of a wave, and I envision the UAE REIT industry [will be worth...] billions of dirhams over the next 10 years." 

Remarking on the development, Dhananjai Cadambi, CEO of Five Capital Limited, added: "The launch of Five REIT demonstrates our commitment to ensuring our investors continue to share in the success of Five and its entrepreneurial approach to real estate development, hospitality, restructuring, and investment.

"In addition to the Five Holdings’ owned areas of the Viceroy Dubai Palm Jumeirah, around 60 investors have committed to contribute their property into the REIT, which we expect will continue to grow as we add more real estate into the portfolio." 

The REIT follows Five Holdings' launch of a new corporate identity, which, according to the press statement, "reflects the group’s continued ambition to grow its current property portfolio of $2bn". 

The UAE-based real estate developer’s updated brand identity has been designed to reflect a corporate philosophy inspired by five elements: earth, air, fire, water, and consciousness.

READ: SKAI Holdings changes name to Five Holdings

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Construction Week - Issue 745
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