Real estate investment trusts to operate in Dubai free zone
Regulators of Dubai's financial free zone announced on Sunday that real estate investment trusts, which use pooled investors' funds to buy and manage property, can now operate from the free zone.
The Dubai Financial Services Authority (DFSA) said in a statement that new regulations which permit the operation of real estate investment trusts (REITS) within the Dubai International Financial Centre (DIFC) paved that way for the move to allow REITs to operate in Dubai's free zone.
"In many of the world's major capital markets, REITS have become the most favored method for attracting public ownership in property investments," said DFSA Chief Executive David Knott, according to Gulf News.
The news laws were introduced on August 6, 2006, and follow the approval of the Investment Trust Law on August 1. The new rules will enable the floating of REITs for the first time in the Duabi region, using the facilities of the Dubai International Financial Exchange.
REITs are a corporation or a trust that utilizes pooled capital of a multitude of investors to purchase and manage property. The trusts are traded on exchanges like stocks, and are therefore highly liquid unlike real estate.
In addition, REITs enable sharing in residential and non-residential properties alike, while offering several benefits over actually owning properties.