Dubai-based real estate development and hospitality group Five Holdings (previously known as Skai Holdings) has announced the launch of a Dh2.1-billion ($571 million) real estate investment trust (REIT).

The region’s first REIT with a complete focus on hospitality will include Five Holdings’ Dh4.3 billion ($1.17 billion) Viceroy Dubai Palm Jumeirah, and all future projects subject to compliance with regulatory requirements. It will be regulated by the Abu Dhabi Global Market (ADGM) and Financial Services Regulatory Authority (FSRA).

REITs issue securities in the form of shares that invest in income-generating real estate including mortgages and may be traded like a stock when offered to the public.

They allow investors to have an underlying stake in real estate, which in turn allows them to diversify their exposures and investments, as well as benefiting from long-term capital appreciation.

Five Holdings has also unveiled its new corporate identity. Previously known as Skai Holdings, the firm’s new name and philosophy is based on the five elements and reflects the group’s continued ambition to grow its current property portfolio of $2 billion.

Kabir Mulchandani, the chairman and chief executive of Five Holdings, said: "Real estate is a major contributor to the UAE economy and Five Holdings continuously looks at new ways to innovate and ensure that our investors have more avenues to investing their money."

"Owning units in a REIT instead of holding the title to a physical asset means investors will be able to buy and sell at a lower cost and with more flexibility. Investors will be able to monetise faster in a public offer by owning units within a REIT as opposed to a physical asset," he noted.

“REITs offer a compelling investment vehicle where risk is spread across a number of real estate propositions under one portfolio. This is the beginning of a wave and I envision the UAE REIT industry to be hundreds of billions of dirhams over the next 10 years,” he added.

Dhananjai Cadambi, the chief executive of Five Capital Limited, said: "The launch of Five REIT demonstrates our commitment to ensuring our investors continue to share in the success of Five and its entrepreneurial approach to real estate development, hospitality, restructuring and investment."

"In addition to the Five Holdings’ owned areas of the Viceroy Dubai Palm Jumeirah, around 60 investors have committed to contribute their property into the REIT, which we expect will continue to grow as we add more real estate into the portfolio," he noted.

In addition to Five Holdings’ Viceroy Dubai Palm Jumeirah, Five REIT is expected to include its Dh1.28-billion ($349 million) Viceroy Dubai Jumeirah Village, which is now 40 per cent complete and on track to open in the third quarter of 2018.

Additional projects will be added as they are announced or acquired.

Five Holdings new corporate identity stems from the five elements. While earth represents trust and strong foundations; water represents fluidity and adaptability; fire represents passion and execution; air represents freedom and growth; and consciousness represents vision and contribution to society and the economy.

These elements also represent the Five founders’ entrepreneurial qualities, which shared collectively, leads to a strong cohesive team that manifests in annual profits of over $100 million.-TradeArabia News Service