Oman REIT Fund seeks to leverage portfolio of prestigious assets

Well-known retail, commercial, office and residential landmarks are among a geographically diverse portfolio of 20 properties that form part of the Oman REIT Fund, which opened for public subscription on Sunday. Shumookh Fund Management LLC, the investment arm of the Public Establishment for Industrial Estates (Madayn), is the investment manager of the REIT Fund, while United Securities is the Issue Manager. Forty per cent of the Fund’s total value of RO 65.48 million is being offered for subscription via an Initial Public Offering (IPO) which runs until January 31, 2021. However, depending upon demand, the issuer can accept up to 60 per cent of total fund, the promoters announced on Thursday. As only the second Real Estate Investment Trust (REIT) Fund to be rolled out in the Sultanate to date, Oman REIT Fund is looking to leverage its portfolio of prestigious assets to attract investors. Included in the portfolio is a selection of mixed-used commercial and residential properties, shopping and retail landmarks, and light industrial and logistics-related holdings. As of August-end 2020, the properties were covered by as many as 480 lease contracts distributed among government, corporate, retail and SME clients. Ten of the properties included in the Fund comprise mixed-used residential and commercial assets that include prime landmarks in Muscat Governorate. Representing the office component are four properties offering in excess of 56,000 sq metres of built-up space. Prominent among them are Building 4 of Knowledge Oasis Muscat (KOM) technology park in Al Rusayl and the EY Building in Qurum. Adding cachet to the portfolio are three prominent retail properties offering nearly 19,000 sq metres of leasable area. They comprise Oasis Mall (Al Khuwair — Muscat), Centre Point (Salalah) and Lulu Building (Salalah). Rounding off the list are warehouses and light industrial premises in the Al Rusayl, Misfah and Al Mawaleh neighbourhoods. At a press conference to announce the IPO last Thursday, Jasser al Aulaqi, CEO of Shumookh Fund Management LLC, said the IPO represents an attractive opportunity for investments – Omani and non-Omani – notwithstanding the current economic downturn. He cited in this regard a slate of recent government bond issuances, as well as private placements, all of which were oversubscribed. “We are 100 per cent sure that, if given the right opportunity, investors will go for it,” said Al Aulaqi of the Oman REIT Fund public offering. “Shumookh Fund was founded to create opportunities for investors. With an annual dividend of at least 7 per cent, the IPO is definitely worth considering.” Oman REIT Fund aims to pay an annual dividend of 7.5 per cent per annum in the first year, which can grow up to 8.2 per cent per annum during the fifth year. According to Tariq Abdelrazeq, Deputy General Manager of United Securities, more assets are proposed to the added to the Fund in the future. “Every asset will be evaluated and studied carefully, while the Board will decide whether to acquire these assets based on the Fund’s future investment policy.”