DLD’s REIT Privileges Registry: Unlocking Investment Opportunities in Dubai

Real Estate Investment Trusts (REITs) have revolutionised real estate investments by making them accessible to a wider audience. Over time, they have become a popular way to earn regular income, grow investments, and diversify portfolios. In this blog, we explore the REIT privileges registry, its benefits, and the streamlined process of REIT registration in Dubai.

What is Real Estate Investment Trust (REIT)?

A Real Estate Investment Trust (REIT) allows individuals to invest in income-generating real estate by purchasing shares. It offers regular returns without the need to own or manage properties directly. REITs include residential, commercial, and industrial spaces, thus a diverse and accessible investment option.

Why was the REIT Privileges Registry Introduced in Dubai?

Dubai’s REIT privileges registry, initiated by the Dubai Land Department (DLD) under Decree No. 22 of 2022, aims to:

• Attract foreign and local investors.
• Boost real estate activity through collaboration under the Dubai Economic Agenda D33.
• Encourage private sector participation in Dubai’s growth.

This initiative supports Dubai’s vision of becoming a global real estate investment hub by offering investors a simplified and secure pathway to participate in the property market.

Types of REIT You Can Invest in Dubai

Real Estate Investment Trusts (REITs) own, operate, or finance income-producing real estate. They are primarily categorised based on their investment focus and trading status.

Key Benefits of REIT Registration in Dubai

Real Estate Investment Trusts (REITs) have become a popular way to invest in Dubai’s property market. Here are some key benefits of the REIT:

• Affordable Entry: The REIT privileges registry allows investors to enter the Dubai real estate market with less money than buying property directly.
• Regular Income: Investors receive consistent income through dividends, providing a steady cash flow.
• High Liquidity: REITs can be bought and sold like stocks, making it simple for investors to access their money when needed.
• Diversified Investments: Investing in REITs offers exposure to various property types, reducing the risk of investing in a single property.
• Expert Oversight: The REIT privileges registry ensures REITs are managed by professionals who handle property acquisition, management, and leasing.
• High-Quality Assets: The registry provides access to premium properties in Dubai that may be otherwise unaffordable for individual investors.
  
• Tax Efficiency: REIT registration in Dubai often comes with favorable tax treatment, with income distributed to investors potentially taxed at lower rates.
  
• Ownership Flexibility: Registered REITs can enjoy absolute ownership or lease properties for up to 99 years.
  
• Reduced Fees: REITs benefit from lower costs for property transfers, asset registration, and usufruct or long-term rental rights. These fees apply only to transactions under the trust and not to shareholder sales.
  
• Ownership in Restricted Areas: Registered trusts can own properties restricted to non-citizens, subject to approval.

Platforms to Invest with REITs Registration

Investing in REITs is a simple way to invest capital without any physical purchase. Here are the most common ways to do it:

• REIT Stocks: You can purchase shares of publicly traded REITs on stock exchanges. This lets you choose specific companies or sectors you’re interested in in the Dubai real estate market.
  
• REIT Mutual Funds: These funds hold a mix of REITs and are managed by professionals. It’s a good option if you want someone else to handle diversification.
  
• REIT ETFs: Exchange-traded funds (ETFs) track REIT indices and work like stocks. They’re easy to buy and sell, giving quick access to a diversified portfolio.
  
• Private REITs: For those who qualify, private REITs offer unique opportunities. They aren’t publicly traded, meaning they’re less liquid and often require a larger upfront investment.

Eligibility Criteria of REIT Registration in Dubai

To register a REIT in Dubai, the following requirements must be met:

• Commercial License: The REIT must possess a valid commercial license issued by Decree No. 22 of 2022.
  
• Asset Valuation: The REIT should hold real estate assets with a market value exceeding AED 180 million.
  
• Founders’ Identification: Valid identification documents are required for all trust founders.
  
• Authorised Representatives: Formal authorisation letters for individuals managing fund-related transactions on behalf of the trust must be provided.
  
• Fund Manager Approval: The Dubai Financial Services Authority (DFSA) must issue a clearance letter confirming the fund manager’s qualifications.
  
• Incorporation Contract: A detailed contract outlining the trust’s shareholders, ownership percentages, and related agreements is required.

How do you Register Yourself with DLD for REIT Privileges?

The Dubai Land Department (DLD) offers REITs a clear path to access benefits by registering their real estate investments. This process involves meeting certain requirements, submitting applications, and adhering to DLD regulations.

• Visit the DLD Office or Trustee Centres and apply online or visit the main office in Deira. For more details, you can also visit their official website at www.dubailand.gov.ae.
  
• Present all required details and application materials for verification. The trustees will review your submission, check the data for accuracy, and ensure compliance with the DLD’s guidelines.
  
• Pay the necessary fees and other applicable charges for ownership transfers or specific property transactions.
  
• After verification and payment, receive your real estate ownership certificates via email. These certificates confirm the successful registration of your REIT privileges registry.
  
• To maintain the validity of your registration, keep all records updated and comply with DLD regulations. This includes ensuring your valuation documents are current and your shareholder details match official records.

Documents Required for REIT Registration in Dubai

To register a Real Estate Investment Trust (REIT) in Dubai, applicants must provide the following documents:

• Commercial License: A valid license issued per the regulations outlined in Decree No. 22 of 2022.
  
• Proof of Real Estate Assets: Documentation verifying assets valued at over AED 180 million.
  
• Founders’ Identification: Valid identification documents for all trust founders.
  
• Authorisation Letters: Formal authorisation for individuals managing fund-related transactions on behalf of the trust.
  
• Approval from DFSA: A clearance letter from the Dubai Financial Services Authority (DFSA) confirming the fund manager’s qualifications.
  
• Incorporation Contract: A detailed contract outlining the trust’s shareholders, ownership percentages, and related agreements.
  
• Detailed Business Plan: Outlines the trust’s objectives, investment strategies, and operational plans.
  
• Financial Statements: Recent audited financial statements demonstrating the trust’s financial health.
  
• Compliance Certificates: Proof of adherence to relevant local laws and regulations.
  
• Property Valuation Reports: Independent assessments confirming the market value of real estate assets.

Terms & Conditions Associated with REIT Registration in Dubai

Registering a Real Estate Investment Trust (REIT) in Dubai involves adhering to specific terms and conditions to ensure compliance with local regulations. Key requirements include:

• Alignment of Ownership Details: The names of real estate asset owners must match the founders’ names as stated in the commercial license.
  
• Asset Valuation: Properties should be appraised according to the Dubai Land Department (DLD) valuation certificate, which must be issued within the last six months.
  
• Authorised Representatives: Individuals handling transactions on behalf of the trust must have a formal authorisation, such as a board resolution or an official power of attorney.
  
• Founders’ Details: The trust’s Memorandum of Association should list the founders’ names and their respective share values.
  
• Compliance with Decree No. 22 of 2022: The trust must operate according to the stipulations outlined in this decree, which governs granting privileges to real estate investment funds in Dubai.

Fees & Charges of REIT Registration with DLD

Registering a Real Estate Investment Trust (REIT) with the Dubai Land Department (DLD) involves specific fees:

Conclusion

Dubai’s REIT privileges registry is a game-changer for real estate investors. It simplifies investment and offers exciting benefits. This initiative allows local and global investors to explore new opportunities in a thriving market. It’s more than just investment—it’s about being part of a city that’s always growing and innovating. Dubai’s REIT platform is the perfect choice for investors looking for growth and stability.

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