IslamicFinance.de

With the continuous growth of Islamic banking in the GCC, products such as Islamic Real Estate Investment Trusts (I-REITs) have started to emerge. Al Mahrab Tower REIT was the first private I-REIT in Kuwait in 2007. Following that, Dubai launched its first I-REIT (Emirates REIT) in 2010 and Bahrain listed its first public I-REIT (Eskan REIT) in 2017. Emirates NBD has also recently listed ENBD REIT and due to strong demand the offer was oversubscribed. Firms responded to this growing demand, including IdealRatings, which launched its first Sharia-compliant REIT index in 2015. While the future of I-REITs may seem positive, there are many challenges that lie ahead. It is important for asset management firms to devise efficient and logical I-REIT investment methodologies. This needs to be supplemented by sound ethical principles to ensure the sustainable growth of I-REITs in the region.