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Oman REIT Fund will be a game changer in real estate sector

TAS News Service

Sunday, January 17, 2021

MUSCAT: Bringing excitement to Oman’s real estate market, Jasser Al Aulaqi, the CEO of Shumookh Fund Management, has announced the launching of OMR65.48 million ‘Oman REIT Fund’, one of the largest real estate investment funds in the Sultanate.

The fund’s OMR39.28 million IPO (initial public offering), representing 60 per cent of the total fund, will be available for subscription from January 17 to January 31.

Shumookh Fund Management is the sponsor and investment manager of the fund while the United Securities is the issue manager, handling the public offer.

“Oman REIT Fund offers an investment opportunity to the investors to participate in Oman’s high potential real estate market by allowing them access to a diversified portfolio of real estate assets located at strategic locations across the Sultanate,” Aulaqi said.

“Oman REIT Fund could be a game-changer in Oman’s real estate sector. The fund presents investors with multiple benefits including stable and high income, hedge against inflation and high liquidity along with professional management of their wealth by a team of investment experts,” he pointed out, adding, “The fund’s aims to pay an annual dividend of 7.5 per cent p.a. in the first year, which can grow up to 8.2 per cent p.a. during the 5th year.”

The close-ended Oman REIT Fund will be listed on the Muscat Securities Market (MSM) for secondary market trading upon closure of the IPO. The Capital Market Authority (CMA), Sultanate’s regulator has already given the necessary approval for the fund to open to the public, Aulaqi informed.

Oman REIT Fund has its assets distributed across sectors in such a way as to ensure higher and steady returns, Aulaqi noted, saying, residential cum commercial properties represent half of the fund’s allocation, followed by office and retail assets at 29 per cent and 13 per cent respectively. Logistics and industry properties make up the rest.

Expressing hope in Oman’s real estate sector growth, Aulaqi said, “Supported by Oman government’s continued focus on economic diversification, the Sultanate’s real estate sector is poised for vibrant growth, and this makes Oman REIT Fund an unmatched investment tool. The fund has in place an active asset management strategy and the availability of asset pipeline at an attractive valuation significantly enhances its appeal.”

“Oman REIT Fund is arguably the largest REIT in the Sultanate with the total appraised value of properties pegged at OMR64.48 million. It has a diverse portfolio of as many as 20 high-worth individual property assets spread across the capital area including Ruwi, Madinat Qaboos, Qurum, Al Khuwair, Ghala, Rusayl and Misfah, with a strategic mix of residential and commercial, retail, office and industrial as well as logistics properties. The ranking of the Fund is expected to be on top among its peers upon listing on the MSM, in terms of market cap,” he continued.

According to Tariq A Razeq, Deputy General Manager of United Securities, the current offer is for 392,855,364 units including Green Shoe option, and each unit is priced at OMR0.102 (unit price RO 0.100 and 2 baisa towards issue expenses).

Oman REIT Fund promises strong growth potential supported by a diversified, high-value asset portfolio, he said, adding, the Fund offers a simple and affordable means to invest in Oman’s high-value real estate sector without buying the property directly and to enjoy long-term capital appreciation and reliable income that grows at an estimated rate of 7.5 per cent to 8.2 per cent over 5 years. Investors can subscribe to the IPO for as low as OMR102 and going up to a maximum of OMR16.37 million in a single application which is for 163,689,735 units (25 per cent of the fund size).

Highlighting the relevance and attraction of Oman REIT Fund, Razeq said infrastructure development is a key element of Oman’s Vision 2040 and the expected high growth in its tourism, hospitality, industrial and healthcare sectors would certainly have a positive impact on its real estate sector, making Oman REIT Fund one of the most attractive financial instruments in the country. 

This is possibly the best time to invest in Oman-based REIT in view of the prevailing low real estate prices in Oman due to COVID-19 crisis, and the expectation is that the prices will shoot up in the near future, he added.

Elaborating on the types of investments the fund offers, Razeq said investors can choose the category I or category II depending on the investment size and status. Category I has a minimum and maximum application sizes of 1000 and 10,000,000 units respectively while the minimum and maximum application sizes for category II investors stand at 10,000,100 and 163,689,735 units respectively.

The fund is open for subscription to both Omani and non-Omani individuals and juristic persons, and its designated collection agents are Oman Arab Bank, Bank Muscat, Bank Dhofar, National Bank of Oman, Ubhar Capital, Global Financial and United Securities.
The subscribers can contact the collecting banks and agents for submitting the application.