Saudi real estate investment trusts (REITs) closed 7.6% higher year-on-year (YoY) in 2021, primarily boosted by higher property prices and fixed dividend payment, despite the weakened performance in H2 2021, SNB Capital said in a report.
Saudi REITs are forecast to pay a cash dividend of SAR 887 million for 2021, up by 21.4% YoY. Despite REITs’ improved performance last year, this dividend is still lower compared to SAR 958 million in 2019.
Saudi REITs are expected to generate a total dividend yield of 4.9% in 2021, compared to 4% in 2020.
Nevertheless, these funds are estimated to report a positive performance in 2022, backed by hedging against inflation, in addition to higher property prices in 2021, which will bolster the rental revenue.
Other factors that will positively impact the Saudi REITs’ performance include improved rental revenue, in the light of the landlords’ rent waiver that coincided with the COVID-19 outbreak, in addition to lifting restrictions on the foreign ownership of properties in Makkah and Madinah.
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