<The Capital Market Authority (CMA) has added a new real estate investment fund by approving Musharaka Capital's application This is in addition to the CMA's approval last June for the listing of Musharaka REIT as a publicly traded real estate investment fund (REIT), in addition to the CMA's approval last June for the listing of Al Maather REIT, which is affiliated with Bakhit Investment Assets.

Objectives of real estate funds

The main investment objectives of REITs are to invest in structurally developed properties that can generate periodic and rental income, and REITs allow all categories of investors to buy and sell fund units in the same way shares are traded in the financial market, according to the instructions for REITs announced by the Capital Market Authority at the end of October 2016.

The Saudi market has witnessed a significant increase in the number of REITs since the beginning of the year, with the launch of the “Al Mather REIT Fund” of “Awsol & Bakhit Investment Fund”.

Since last November, the Saudi market has witnessed the listing of four real estate ETFs, namely Riyad REIT, Al Jazira Mawtan REIT, Jadwa REIT Al Haramain, Taaleem REIT, which was listed last May, and Musharaka REIT, whose application was recently approved.

Tadawul's approval is not Jadwa's endorsement

<The CMA invited investors to obtain the terms and conditions of the “Musharaka REIT Fund” on the website of the fund manager and the website of the Capital Market Authority, which contains the information and data that the investor needs to review before making the decision to invest or not, warning of the high risks of ignoring the terms and conditions and studying their content, and indicated the need to understand the general provisions and consult a licensed financial advisor, These clarifications come from the Capital Market Authority so that investors do not think that accepting an application to establish a real estate investment fund as an endorsement of the feasibility study and an invitation to enter it as the decision of the real estate investment fund is not an endorsement of the feasibility study and an invitation to enter it.

Compliance with Capital Market Regulations

Like other investment instruments in the financial market, REITs are subject to oversight and supervision by the Capital Market Authority (CMA) and Tadawul, each according to its jurisdiction, and capital market regulations require REITs to have higher levels of transparency and disclosure than those imposed on investment options available in the traditional real estate market.

Real estate investment funds (REITs) can be owned and managed by the CMA and Tadawul. ETFs can own developed and ready-to-use real estate, including residential, commercial, industrial and agricultural properties, and can invest locally, regionally and internationally in accordance with CMA regulations, provided that the total value of the fund's real estate assets outside the Kingdom does not exceed 25%.

The CMA regulations require ETFs to have higher levels of transparency and disclosure than traditional real estate market investment options.

Characteristics of REITs

Conditional Return: Dividends distributed to unitholders must be at least 90% per year of the fund's net profits.

Real Estate Investment Trust

Real Estate Investment Trust.

Investment Opportunity: REITs offer the opportunity to invest at low cost in real estate funds with a minimum value of 100 million riyals.

Real Estate Investment Trusts (REITs).

Ease of Investment: REITs are characterized by the clarity of their regulations and the ease of dealing with their units - buying and selling - similar to stocks listed on the financial market.

Real Estate ETFs offer the opportunity to invest at a low cost in real estate funds.

Existing Real Estate: REITs hold real estate assets that are constructed, developed, ready-to-use and generating rental or operating income.

Real estate ETFs contain real estate assets that are constructed, developed, ready-to-use and generating rental or operating income.

High Transparency: The fund manager is obligated to submit periodic reports about the fund and they are displayed on Tadawul's website like other reports of listed companies in the financial market.

High Transparency.

Other features of real estate ETFs

<Liquidity (flexibility): Fund units can be bought and sold in the financial market throughout the trading days and periods.

Low initial cost. <Low initial cost of investing in real estate. Periodic distribution of profits according to clear and regulated policies.

High transparency. High transparency.

High transparency. Greater obligations and restrictions on the fund manager.

Greater obligations and restrictions on the fund manager.