IREITs: An Unrealized Potential in Gulf, Issues and Recommendations
Keywords:
REITs, IREITS, Gulf, ChallengesAbstract
Islamic finance has gained attention of the world especially after rich Gulf States petrodollars have flushed their coffers due to record high oil prices. Setting up of sovereign funds by many countries which hold billions of dollars, investing ethically is a challenge.
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New Islamic financial institutions are being set up and organizations like AAOIFI are introducing standards for stakeholders to follow and invest according to Islamic principles. However as compared to the west these initiatives still lag behind and have a great scope to further expand.
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Islamic Capital Markets and Instruments are in their infancy. Islamic Real Estate Investment Trusts [IREITs] are one of the investment vehicles with huge potential and which can contribute to these capital markets. This paper examines the challenges and proposes certain suggestions to the concern parties on IREITs in the gulf region.
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