Encore, Sumou set up first Islamic Reit in Saudi
Riyadh, October 8, 2008
Encore, an independent Swiss asset management company, has joined hands with Sumou Holding to set up the first Shariah-compliant real estate investment trust (Reit) in Saudi Arabia.
Sumou will be the operational manager, while Encore Fund Management of Bahrain will be the fund manager of the trust, said a Emirates Business report.
The size of the Reit, according to John Sandwick, Encore's managing director, cannot be boxed but may reach more than SR5 billion (Dh4.89 billion).
A Reit is a security that sells like a stock on the major exchanges and invests in real estate directly, either through properties or mortgages.
'It's big. Could we do a billion riyal? Yes, it is easy. You have to imagine that the Saudi landscape is full of all kinds of savers.'
'They have accrued cash from households to endowments, corporations to government agencies. They have to deploy that cash,' he said.
Sandwick did not specify the minimum subscription for the investment trust. However, he said the Reit is designed for 'the common average investing family and the small and medium size businesses in Saudi Arabia who want to go into real estate but do not have technical expertise or sufficient savings'.