الاسم الكامل
الدولة
رقم الهاتف
عند النقر على "استمرار" فإنك توافق على شروط الاستخدام و شروط الاستخدام
هل لديك حساب؟
إعادة ارسال الرمز :

On 23/1/1438H, the Financial Affairs Council at the Capital Market Authority issued a decision regarding the instructions for Real Estate Investment Trusts (REITs). Within just six months, five REITs were launched in the financial market with a total value exceeding 1.5 billion SAR. However, there has been confusion between the concept of a "traded real estate investment fund (REIT)" and a "traditional real estate investment fund," leading to a lack of clarity for investors wishing to invest in real estate funds. Clarifying the distinction between these two concepts helps investors determine their investment options in real estate funds. It is known from the outset that a traded real estate investment fund (REIT) is: "A fund publicly offered, its units traded in the market, investing in developed real estate capable of generating periodic rental income, and a specific percentage of the fund's net profits is distributed in cash to the unit holders of the fund during its operation, at least annually." From this definition, it is evident that traded funds are listed on the stock exchange, unlike traditional real estate investment funds, which are not listed. This means that exiting traded funds is more straightforward and easier than exiting traditional funds. In addition, traded funds are closed-end, meaning they are established with a fixed capital offered for subscription. Traditional funds, on the other hand, may be closed-end or otherwise. The main investment objective of traded funds is to invest in ready-developed real estate, whether for residential, commercial, agricultural, or other uses. Traditional funds, however, may invest by developing raw land and selling it, or by developing land (raw or developed) and constructing residential or commercial units for subsequent sale, or through initial or construction development for rental for a specific period before eventual sale. Another significant difference is that traded funds must invest in properties capable of generating periodic rental income for at least 75% of the fund's total assets, whereas traditional funds may invest through development and subsequent sale. A restriction unique to traded funds (not found in traditional funds) is that the number of public unit holders must not be less than 50. Public unit holders include anyone owning a unit in the traded fund, except those owning 5% or more or the fund manager and their affiliates. Regarding profit distribution, traded funds must distribute no less than 90% of the net profits to unit holders annually, whereas traditional funds do not distribute profits until the end of the fund period. Based on these differences, the main advantages of traded real estate investment funds compared to traditional funds are as follows: 1-Easier exit from traded funds compared to traditional funds, as they are traded on the stock exchange like listed shares. 2-Lower cost for investors with small capital. 3-Transparency through periodic reports about the fund displayed on the Tadawul website. 4-Clear and stable investment with fixed annual returns, with annual profit distribution not less than 90% of the traded fund’s net profits. 5-Lower risk due to investment in developed real estate capable of generating periodic rental income, and no more than 25% of investments outside the Kingdom.
"A traded real estate investment fund (REIT) is a publicly offered fund, its units traded in the market, investing in developed real estate capable of generating periodic rental income, and a specific percentage of the fund's net profits is distributed in cash to the unit holders at least annually."