Singapore may expect its first listing of an Islamic real estate investment trust (REIT) by a foreign company in the next two years, according to an interview with Sabana Real Estate Investment Management.
Kevin Xayaraj, Chief Executive Officer of Sabana, noted that the firm, which manages the Sabana Shari’ah Compliant Industrial REIT, has been approached by entities from the Persian Gulf, Southeast Asia and Russia to offer advice on setting up such trusts.
Sabana, the world’s largest publicly traded Islamic REIT, is the only REIT in Singapore that complies with Islam’s ban on interest.
“These companies have assets in the region, Russia, and the Middle East, including Saudi Arabia,” Mr. Xayaraj said.
“We are keen to explore as long as there is no competition with Sabana. We are looking into how we can help.”
Persian Gulf companies are planning Islamic REITs, which pay returns to investors based on dividends or rental income. Dubai is planning to list a trust on the local exchange within a year.
In addition, two United Arab Emirates companies are planning to launch an offering in Malaysia, introduced to the industry in 2006.
Sabana raised S$664.4 million from an initial public offering (IPO) in November. Malaysia, the biggest market for Shariah-compliant bonds, has three Islamic REITs.
According to a March report by CB Richard Ellis (CBRE), Malaysia’s 14 REITs, which comprise Islamic and non-Islamic trusts, have a shared market value of US$3.4 billion (S$4.2 billion), 12 percent of Singapore’s US$29.3 billion.
“The Singapore REIT market is extremely liquid and institutional investors want the ability to go in and out at anytime,” Mr. Xayaraj said.
He added that Sabana is planning to grow its asset portfolio this year to S$1 billion from S$852 million.
To contact the journalist, you may send your message to editor@propertyguru.com.sg