Bahrain's Eskan Bank Realty Income Trust has announced that expatriates and foreign investors are now eligible to purchase and trade in units of the trust on the Bahrain Bourse.

The move follows approval by the Central Bank of Bahrain for such investment, the company said.

The trust, which is Bahrain’s first Sharia-compliant retail real estate investment trust (REIT), is the first to be listed on the bourse and also the first unleveraged listed REIT in the GCC.

The trust has an attractive target of 6.5 per cent in net distributable income payable semi-annually. It offers investors a new alternative asset class with the opportunity to share in a stable diversified property portfolio; together with liquidity by being able to easily convert units to cash via trades on the Bahrain Bourse.

Additional liquidity is provided by a dedicated market maker on an ongoing basis. The underlying properties of the trust – retail, office and residential – currently have a combined occupancy rate of over 86 per cent; and there has been a recent pick up in leasing enquiries from prospective tenants, it said.

Dr Khalid Abdulla, general manager of Eskan Bank, said: “We are delighted that expatriates and foreign investors will now be able to buy and trade in units of the Eskan Bank Realty Income Trust. This will provide the trust with a more diversified unitholder base and greater global funding potential. It will also enable investors, regardless of nationality, to share in the ongoing development of Bahrain’s real estate sector and national economy.”

The eligibility of expatriates and foreign investors to trade in units of the trust results from new regulations issued by the Central Bank of Bahrain following enactment of the new Bahrain Trust Law in November 2016, which relaxed certain legal procedures with regard to trust holdings such as real estate assets.

Trading in the REIT, which was listed on the Bahrain Bourse on January 2, 2017, was initially restricted to GCC nationals because the underlying properties of the trust are located in areas of the kingdom not open to expatriates and foreign investors.

Najla Al Shirawi, chief executive officer of Sico, previously the mandated lead manager for the offering, and currently sub-investment manager and dedicated market maker for the REIT, said: “I would like to thank the Central Bank of Bahrain for its continuous and progressive enhancement of regulations, and the Bahrain Bourse for its ongoing reform initiatives, which support the development of the kingdom’s capital markets. It is pleasing to note that since listing on the Bahrain Bourse at the beginning of this year, the Eskan Bank Realty Income Trust has witnessed active trading on a weekly basis. The opening up of trading to expatriates and foreign investors will further improve the liquidity of this REIT, and the bourse as a whole.”

The trust also announced that in accordance with the terms of the offering prospectus and trust instrument, the first semi-annual (January to June) dividend of the REIT will be distributed in early September 2017. The payment date is governed by a regulatory process which entails closure of the books on June 30, 2017, an independent property valuation, external audit of the financial statements, and final approval of the proposed dividend by the Central Bank of Bahrain, it said.-TradeArabia News Service