Three Omani companies are planning to establish real estate investment trust (REIT) fund, following the market regulator’s announcement of a new regulation for real estate focused funds.
These companies are expected to float funds to raise capital from the investing public this year, according to Capital Market Authority (CMA).
REIT funds are securities that sell like a stock on the bourse and invest in real estate directly, either through properties or mortgages.
Some of the real estate developers are also expected to create REIT funds to transfer part of their assets under the scheme, Times of Oman reported.
The new regulation permits funds to own residential complexes provided the area is not less than 10,000m2. However, the funds are not allowed to own vacant or agricultural land.
Real estate investment funds can mobilise money directly through the issuance of bonds of up to 60% of the total assets.
The minimum capital for establishing a REIT fund is $26m.
Sheikh Abdullah Salim Al Salmi, executive president of the CMA, said: “The new regulation enables property developers to unlock their assets and allows small investors to invest in real estate projects.”
As per the new regulation, the funds can invest only in real estate projects that are 90% complete.