Two questions: 1. Do you want a slice of the profits from Dubai’s booming real estate sector? 2. Do you want to make money while you sleep? If you answered “Yes!” to these questions, this article is meant for you.

You may have come across a recent piece of news regarding Dubai Holding’s announcement of a ‘Dubai Residential REIT’ IPO in the Dubai Financial Market. If you sighed and said to yourself,

“I want to…But I don’t have the money or time to invest in real estate”

Then you need to keep reading because the Dubai Real Estate sector has created something that might serve you: A Real Estate Investment Trust (REIT).

What is a REIT?

Glad you asked. A Real Estate Investment Trust (REIT) is a company or fund that owns and manages an income-generating real estate portfolio and distributes the majority of that income to investors through dividend payments. Basically, this is a collection of Dubai properties that you can invest in for a fraction of the price. Think “my eggs are in different baskets.” (We’ll get back to this point a little later in the article).

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The main value of REITs compared to traditional equities lies in their consistent income through dividends; capital appreciation is secondary. Meaning, even if the property is not the best, or in a prime location, you will still get dividends thanks to the tenant renting out the space.

Over long periods, dividends make up the majority of total REIT returns.

Why should I care about REITs in the UAE over other countries?

REITs themselves are tax-exempt, and UAE-based individual investors are not subject to income tax on dividends or capital gains. (In April, new regulations were issued stating that UAE-based REITs are exempt from corporate income tax and UAE-based individual investors are not required to pay tax on dividends or capital gains.)

To compare, a company like Apple (AAPL) may choose to issue dividends if it generates surplus profits and the board approves it. In contrast, REITs in the UAE are required to distribute at least 80% of their profits as dividends — meaning that as long as a REIT is profitable, it must pay out dividends

REITs allow investors to benefit from real estate ownership without the hassle of directly managing properties, and for a small upfront investment

Unlike single-property investments, REITs offer exposure to multiple assets and sectors. which is awesome because in thriving cities you wanna be a part of everything, and here you get to do that without directly managing anything, and for a price that’s wallet-friendly.

What are the other benefits of REITs?

• Investors can adjust their exposure by buying or selling REIT units in any amount.
• Publicly traded REITs are listed on stock exchanges, allowing investors to buy and sell units more easily than direct property investments.
• REIT portfolios are actively managed by specialised teams who handle acquisitions, leasing, maintenance, and value creation strategies.

You’re now equipped with the basics to help you get started

Now all you need to do is create an investment account, evaluate your options with all the new REITs coming up, and start your investing journey!

This is not investment advice.