IREITIslamic Real Estate Investment Trusts
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5 Park Avenue properties IREIT Little Rock Park Avenue LLC
The principal objective of the IREIT is the acquisition of income generating properties in the GCC which ensure an acceptable risk-adjusted return on investment in the form of quarterly profit distribution whilst ensuring reasonable capital appreciation.
With a clear understanding of the market and its conditions, the IREIT has a high degree of risk mitigation built into it.
Some of the unique features of the IREIT include its incorporation under Bahrain's Trust Law whereby a board of trustees follow international best practices that will ensure protection of unit holders' interests, distribution of 90 per cent of the income of the trust on a quarterly basis, restrictions on risky developments or off-the-shelf opportunities, geographical and property diversifications, cap on Ijarah financing, and absolute transparency.
It is intended to list IREIT on the Bahrain Stock Exchange.
"Given the strict criteria and supervision coupled with disciplined approach to building the pipeline, IREIT will be in the best position to offer superior risk adjusted returns to its investors," he added.
Lack of tax advantages due to absence of tax regimes and meagre awareness of IREITs in the general public coupled with the recent slump in business cycles has not allowed the idea to evolve in the region and its potential to be fully realised.
The academic and training institutes along with the chambers of commerce can organise courses, seminars and workshops to highlight the working modalities and advantages of IREITs.