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  • IFR 6.11 IFR 6.11 Islamic Real Estate Investment Trusts (Islamic REITs)

    • IFR 6.11.1

      (1) A Fund Manager must ensure that it does not call, or otherwise hold out, a Fund as being an Islamic Real Estate Investment Trust or as being an Islamic REIT unless it is a Public Property Fund which is constituted in accordance with (2).
      (2) An Islamic REIT is a Public Property Fund which:
      (a) is constituted either as an Investment Company or as an Investment Trust;
      (b) is primarily aimed at investments in income generating Real Property which complies with Shari'a principles; and
      (c) distributes to the Unitholders at least 80% of its audited annual net income.
      Derived from DFSA RM69/2010 (Made 1st March 2010). [VER1/03-10]
      [Amended] DFSA RM72/2010 (Made 11th July 2010). [VER2/07-10]

    • IFR 6.11.2

      (1) A Fund Manager of an Islamic REIT must ensure that it distributes to the Unitholders as dividends each year an amount not less than 80% of its audited annual net income.
      (2) The Persons providing oversight functions in respect of the Fund must determine if any;
      (a) revaluation surplus credited to income, or
      (b) gains on disposal of Real Property,
      shall form part of net income for distribution to Unitholders.
      Derived from DFSA RM69/2010 (Made 1st March 2010). [VER1/03-10]
      [Amended] DFSA RM72/2010 (Made 11th July 2010). [VER2/07-10]

    • IFR 6.11.3

      Where an Islamic REIT holds any Real Property via one or more Special Purpose Vehicles, the Fund Manager must ensure that each Special Purpose Vehicle distributes to the Fund all of its income as permitted by the laws and regulations of the jurisdiction where the Special Purpose Vehicle is established.

      Derived from DFSA RM69/2010 (Made 1st March 2010). [VER1/03-10]
      [Amended] DFSA RM72/2010 (Made 11th July 2010). [VER2/07-10]

    • IFR 6.11.4 IFR 6.11.4

      (1) A Fund Manager of an Islamic REIT must ensure, subject to (2), that any investment made in respect of property under development whether on its own or in a joint venture is undertaken only where the REIT intends to hold the developed property upon completion.
      (2) The total contract value of the property under development in (1) must not exceed 30% of the net asset value of the Fund Property of the Islamic REIT.
      Derived from DFSA RM69/2010 (Made 1st March 2010). [VER1/03-10]
      [Amended] DFSA RM72/2010 (Made 11th July 2010). [VER2/07-10]

      • IFR 6.11.4 Guidance

        For the purposes of this Rule, the DFSA would not consider property development activities to include refurbishment, retrofitting and renovation.

        Derived from DFSA RM69/2010 (Made 1st March 2010). [VER1/03-10]

    • IFR 6.11.5 IFR 6.11.5

      A Fund Manager of an Islamic REIT may borrow either directly or through its Special Purpose Vehicle up to 65% of the gross asset value of the Fund provided that such borrowings are Shari'a compliant.

      Derived from DFSA RM69/2010 (Made 1st March 2010). [VER1/03-10]
      [Amended] DFSA RM72/2010 (Made 11th July 2010). [VER2/07-10]
      [Amended] RM160/2015 (Made 9th December 2015). [VER9/02-16]
      [Amended] DFSA RMI274/2020 (Made 26th February 2020). [VER15/04-20]

      • IFR 6.11.5 Guidance

        1. The gross asset value of a Fund should be calculated as the total value of the Fund Property based on the most recent valuation under CIR Rule 8.4.1(1), but without making the deductions provided for in the other paragraphs of that Rule.
        2. As there are no specific risks that arise by virtue of a Fund being an Islamic Fund, the prudential requirements that apply to a Category 3 firm as set out in the PIB module apply to such Fund Managers. However, if the underlying assets of the Fund are invested in financial products or instruments that are Islamic and have certain features which would raise any prudential risks, it is the responsibility of the Fund Manager to address such risks. The DFSA would provide any additional clarifications regarding such matters upon request.
        Derived from DFSA RM69/2010 (Made 1st March 2010). [VER1/03-10]
        [Amended] DFSA RM72/2010 (Made 11th July 2010). [VER2/07-10]
        [Amended] RM160/2015 (Made 9th December 2015). [VER9/02-16]