DUBAI — FIVE Holdings, the Dubai-based real estate development and hospitality group previously known as SKAI Holdings, has launched a AED2.10bn ($570m) real estate investment trust (REIT), the region’s first hospitality focused REIT and the largest to date.
The REIT, to be regulated by the Abu Dhabi Global Market (ADGM) and Financial Services Regulatory Authority (FSRA), will include FIVE Holdings’ AED4.3bn ($1.17bn) Viceroy Dubai Palm Jumeirah, and all future projects subject to compliance with regulatory requirements.
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. REITs allow investors to have an underlying stake in real estate, which in turn allows them to diversify their exposures and investments, as well as benefitting from long-term capital appreciation
FIVE Holdings also unveiled its new corporate identity for the first time today. 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 $2bn.
“Real estate is 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,” said Kabir Mulchandani, Chairman & CEO, FIVE Holdings.
“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.
“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,” said Dhananjai Cadambi, CEO, FIVE Capital Limited.
In addition to FIVE Holdings’ Viceroy Dubai Palm Jumeirah, FIVE REIT is expected to include its AED1.28bn ($349m) Viceroy Dubai Jumeirah Village, which is now 40% complete and on track to open in Q3 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 $100m. — SG
