Riyadh – Mubasher: A vast amount of data across different financial markets showed the positive contribution of Real Estate Investment Traded Funds (REITs) to the development of capital markets, Jadwa Investment reported.
Saudi Arabia targets improving the real estate sector’s growth to 7% per year from the current 4%, with the aim of doubling the sector’s contribution towards GDP to 10% in 2020, the report said.
“In the case of Saudi Arabia, REITs can facilitate the participation of the private sector in developing vacant land plots and raising the supply of real estate by bringing forward alternative sources of finance for the private sector,” Jadwa added.
The report showed that REITs offer a different risk-return profile to conventional investment products such as stocks.
Moreover, REITs can be an effective hedge against inflation, Jadwa added saying that in the case of Saudi Arabia, returns are likely to be even more attractive due to the special tax conditions vis-à-vis other investment products in the Kingdom.
