CBB issues directives for B-REITs

The Central Bank of Bahrain (CBB) has released directives related to Bahrain Domiciled Real Estate Investment Trusts ("B-REITs"), as part of the its commitment to further enhance the REITS framework in the Kingdom of Bahrain under Volume 7 of CBB Rulebook that governs the rules and regulations of Collective Investment Undertakings ("CIUs").

In a nutshell, REITs are CIUs that acquire and operate income generating local and foreign real estate properties, either directly or indirectly and hence, allowing all types of investors to obtain exposure to the Real Estate Market. 

The new directives will encompass retail investors as part of the target investors who are allowed to invest in Bahrain Domiciled REITs. Such removal of the previous restriction on the type of investors in REITs, will allow all types of investors including high net worth, institutional and retail investors to benefit from the attractive characteristics of REITs, such as higher liquidity for listed REITs, regular distribution of cash dividends and high transparency.

Moreover, since REITs are tradeable instruments, such changes to the directives will also make it more feasible and practicable to list B-REITs on the Bahrain Bourse and other licensed exchanges.

Abdulrahman M. Al Baker, Executive Director - Financial Institutions Supervision, stated: "Overall, REITs have become an important addition to the real estate investment landscape in the last few years for both retail investors and the large institutional investors; reflecting the increased growth, maturity, transparency and sophistication of the local, regional and global real estate markets".

The details of the new directives are now available at the CBB website under CBB Volume 7 Rulebook that governs the rules and regulations of Collective Investment Undertakings ("CIUs").