Palmon Group, one of UAE’s home-grown conglomerates, has announced the launch of the first industrial and commercial real estate investment trust (REIT) in Dubai - Manrre.
Established in compliance with the laws and rules of the Dubai Financial Services Authority (DFSA), Mannre will be a property fund and a REIT for qualified investors.
It currently holds a portfolio of 19 real estate properties worth Dh215 million ($59 million) across the UAE. Of this 62 per cent investment is in logistics assets, 23 per cent in industrial assets, 8 per cent in office assets and 7 per cent in staff accommodation, said a statement from the Palmon Group.
The Emirati conglomerate said Manrre would seek to raise about Dh330 million ($90 million) as part of its strategy to acquire additional rent-yielding commercial assets.
Manrre’s stable, low-risk strategy involves focusing on industrial, logistics and commercial assets with UAE as the primary target market.
Its core investment objectives include generating a regular source of income for investors by way of distributing quarterly dividends and targeting 8 per cent annualized return, it added.
“Our vision for Manrre is to list the fund on stock exchange within the next two years to generate maximum return for our investors. As we get closer to 2020, we believe this is the right time to launch Manrre,” remarked Manohar Lahori, the chairman of Palmon Group.
“Since establishing our roots in 1985 in the UAE, and over the last 33 years we’ve been an investor in industrial and commercial real estate,” stated Lahori.
“We leverage the global, regional knowledge and expertise of the team, which today underpins Manrre. With structured, formal governance and an external investment committee validating every investment, the company achieves the ideal balance between personal insight and objective scrutiny and controls,” he added.
Palmon Group said the challenge for investors was the inability to access high-value real estate which generates better returns as it typically requires larger ticket size.
By pooling resources with those of others, qualified investors are able to access these larger assets that might otherwise remain out of reach with a minimum subscrption starting at a $500,000, it stated.
Globally, REITs are a growing segment of the real estate market with an estimated market capitalisation of around $2.1 trillion, according to Cohen & Steers.
Asia is the region with the largest growth in REITs in recent years with Singapore and Japan being the biggest markets.