As soon as the decision to allow the listing of Real Estate Investment Trusts (REITs) on the capital market was issued, it found great acceptance from investors and owners of frozen funds, due to its attractive investment advantages, as capital market regulations obligate ETFs to high levels of transparency and disclosure that exceed those
Distributing of profits
REITs are publicly available real estate investment funds whose units are traded on the Saudi Stock Exchange, known globally as “REITs” or "REITs", and are characterized by their low cost of investment compared to other real estate investment funds and their obligation to distribute of profits. These funds can invest locally, regionally and internationally provided that the total value of the fund's real estate assets outside the Kingdom does not exceed , in accordance with clear and specific policies set by the Capital Market Authority.
Real Estate Funds Trading Conditions:
Dividends distributed to unitholders must not be less than per year of the fund's net profits.
REITs are characterized by the clarity of their regulations and the ease of dealing in their units, buying and selling, similar to stocks listed on the stock market.
REITs contain real estate assets that are constructed, developed, ready-to-use and generate rental or operating income.
The fund manager is obligated to submit periodic reports about the fund and they are displayed on the Tadawul website like other reports of listed companies on the financial market.
Offering and Listing Criteria:
Legal Structure: Closed-end real estate fund.
Number of shareholders: At least 200 shareholders.
Minimum fund establishment: SAR 500 million. Minimum Fund Establishment.
Par value: SAR 10 per unit.
Asset ownership: These assets must be separately identified by registering the securities and other assets of each investment fund in the name of the custodian for that fund.
Real Estate Assets: of the Fund shall be registered in the name of an affiliate of the custodian and the assets of the REIT shall be owned by the unitholders of the REIT collectively. Real Estate Assets:
Dividends: Dividends distributed to unitholders must not be less than per annum of the net profits of the fund.
Borrowing Ratio: The Fund's borrowing may not exceed of the total value of the Fund's assets as per the latest audited financial statements.
Investments: The value of the Fund's investments in structurally upgraded properties capable of generating periodic rental income must not be less than of the total value of the Fund's assets according to the latest audited financial statements.
Real estate under development: The Fund Manager is permitted to invest up to of the total value of the Fund's assets according to the latest audited financial statements in real estate development, whether or not for properties owned by the Fund, or for the renovation or redevelopment of such properties. Real estate under development.
Real estate outside the Kingdom: The fund manager is prohibited from investing more than of the total value of the fund's assets according to the latest audited financial statements in real estate outside the Kingdom. Real estate outside the Kingdom.
Public Ownership: Public unitholders own at least of the Fund's total units. Public Ownership.
White Land: The fund manager may not invest in white land.
