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Qualifying Abu Dhabi Global Market (ADGM) entities, including
special purpose vehicles, foundations and real estate investment
funds, may now hold title to property in Abu Dhabi (onshore and in
the free zone) thanks to an agreement signed by the ADGM
registration authority and the Department of Urban Planning and
Municipalities. This move is aimed at leveraging the ADGM’s
established economic standing and global reliability to enhance Abu
Dhabi’s position in the local and regional real estate market
by creating a more flexible investment and trade environment.
These changes may be of particular interest to fund managers,
especially those who have an investor base of Emirati and/or Gulf
Cooperation Council citizens, as the onshore property ownership
restrictions will likely continue to apply to ADGM entities.
Further, these changes create new opportunities for large
corporates that own income generating property portfolios in Abu
Dhabi, by allowing them to establish real estate investment trusts
(REITs) in the ADGM that would directly own those property
portfolios. In addition to creating more liquidity, these
corporates may use REIT structures in the ADGM to create new fee
income streams, while reducing property asset exposure on their
balance sheets.
To ensure compliance with onshore real estate regulations and
comply with the newly signed agreement, the ADGM registration
authority will monitor share transfers of qualifying ADGM
entities.
The ADGM has entered similar arrangements with other Emirates,
such as the Dubai Land Department.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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