REITs, or Real Estate Investment Trusts, offer a smarter, more accessible way to invest in real estate, without the need to buy or manage property yourself. These funds own and operate income-generating real estate like offices, residential buildings, and retail centers, then distribute the returns to investors.
Typically backed by banks, joint stock companies, or investment firms, Real Estate Trusts are listed publicly after thorough planning and clear investment strategies. What makes them even more appealing is how easy it is to get started; you can enter the real estate market with just a small amount.
Through a seamless, digital-first experience, you can explore investment opportunities on your terms, flexibly, efficiently, and with greater control. Since each REIT has its own structure and strategy, understanding the specifics can help you navigate your options with more clarity and confidence.
Why Investors Are Turning to REITs
- Consistent Payouts: Real Estate Investment Funds (REITs) are legally required, under Capital Market Authority regulations, to distribute over 90% of their annual net profits to investors, making them a suitable option for those seeking steady income.
- Built-In Diversification: Each REIT typically holds a mix of residential, retail, and real estate assets, helping to reduce risk and strengthen portfolio stability.
- Low Entry Point: You don’t need a large sum to get started. With REITs, you can invest with just one unit, giving you access to the property market with minimal capital.
- Transparent by Design: Most REITs are listed on the stock exchange and follow strict disclosure rules. That means clear data, regular reports, and full visibility into where your money is going.
- Room to Grow: Over time, property values may rise, and some funds reinvest their profits into new projects. While returns aren’t guaranteed, REITs offer long-term potential for capital growth.
- Smart hedge against inflation: Real estate is widely recognised as an effective investment for hedging against inflation, as property values and rental income tend to rise over time.
How REITs Support Saudi Arabia’s Vision 2030 and Economic Diversification
REITs are playing a growing role in advancing Saudi Arabia’s Vision 2030, particularly in supporting the long-term development of the real estate sector and expanding access to new investment opportunities.
They also play a powerful role in propelling real estate development across Saudi Arabia. By providing practical financing solutions, they help fund residential and commercial projects, attract both local and international capital, and contribute to economic transformation. As trusted tools for investment, REIT Investment Returns support the country’s vision for a more dynamic and diversified economy. Today, they represent nearly 25% of total assets under management in Saudi Arabia’s capital markets, a clear sign of their continued impact and growing presence.
A Look at the REIT Market in Saudi Arabia
The REIT market in Saudi Arabia is making steady progress, with more than SAR 20 billion in total assets spread across 20 funds, 19 in the main market and 1 in the parallel market. In 2025, the market saw meaningful changes, showing the powerful part REITs play in moving away from oil dependency and supporting the long-term mission of Saudi Vision 2030.
Despite economic challenges like climbing interest rates and decelerating asset growth, Saudi REITs have shown strong determination and capacity to adapt. In 2025, financing costs are expected to decrease by 15–20%, which could make these funds more cost-effective and appealing to investors.
By early 2025, listed REITs were managing a strong portfolio of 229 properties, 216 situated in Saudi Arabia and 13 placed abroad. Standing out in performance is Derayah REIT, which is seen as one of the smartest picks for investors. With a portfolio of 24 properties and total assets surpassing SAR 1.68 billion, its position in the market is solid. The fund’s net asset value reached around SAR 1.02 billion, showing its presence among Saudi Arabia’s top players.
How REITs in Saudi Arabia Have Performed in Recent Years
In recent years, the performance of REITs in Saudi Arabia has varied from one fund to another, shaped largely by shifts in the property market and rising financing costs. Despite these challenges, many funds continued to deliver regular dividend payouts, making REITs a compelling option for investors seeking steady, periodic income.
In 2023, total cash dividends distributed reached approximately SAR 964.2 million. By 2024, the value of REIT-owned assets grew to around SAR 30 billion, with leading funds maintaining their commitment to dividend distribution. Early data from 2025 continues to show stable distributions from several funds, highlighting REITs’ commitment to providing value amid changing market dynamics.
Growth Opportunities in the Saudi REIT Market
The outlook for REITs in Saudi Arabia remains strong, supported by both strategic reforms and evolving demand. Several factors are driving growth:
- Population growth and urban expansion in key cities like Riyadh and Jeddah have led to rising demand for residential and commercial real estate. This opens the door for REITs to scale their portfolios in high-demand sectors.
- Saudi Vision 2030 is actively backing infrastructure and tourism-related projects, such as roads, hotels, and entertainment destinations, creating new pathways for REIT investment in diversified property classes.
- Additionally, REITs play a key role in supporting nationwide megaprojects like NEOM and Qiddiya. These large-scale developments are central to achieving Vision 2030 goals, and REITs help finance and facilitate progress by attracting capital from both local and international investors.
Future Challenges Facing REITs in Saudi Arabia
As the real estate market continues to shift, REIT dividends may face risks and changes that could affect returns. Recognizing these conditions is key to making clear, confident investment choices.
- Shifts in market conditions and asset valuation: Fluctuations in interest rates or reduced demand in the real estate sector may affect the market value of REIT-owned properties, and these changes can influence returns and impact the overall performance of the fund.
- Regulatory changes and potential taxation: Any updates in laws, such as the introduction of new taxes or fees, may affect how profits are distributed or alter the financial outlook of certain funds.
- Financing risks and rising debt levels: Heavy reliance on borrowing can create pressure on some REITs, especially if revenues decline. This may limit their ability to distribute dividends or meet financial obligations.
Understanding these core factors can help you choose the right REIT to invest in with confidence and clarity.
Smart Strategies to Reduce Risk in REIT Investments
There are several practical ways to reduce potential risks when investing in REITs, while also helping to strengthen fund stability and increase the potential for long-term success:
- Cross-sector and Cross-location Diversification: Diversifying across cities and property categories, like commercial, residential, and industrial, can help cushion your investment from market shifts, and this combined approach reduces concentration risk and supports more consistent performance during downturns.
- Checking Cash Flow and Withstanding Power: Checking a REIT’s cash flow, credit strength, and withdrawal history gives you a clearer view of its performance. With the right tools, you can compare options with confidence and choose what works best for your investment goals.
- Partnering With Local Property Management Experts: Strong partnerships with skilled local managers can support smarter decisions, smoother operations, and more stable REIT performance.
Derayah Financial: Your Partner in Real Estate Investing
Derayah Financial is one of the digital platforms available in Saudi Arabia that gives investors the opportunity to access REITs through a seamless, tech-enabled experience.
With a broad selection of REITs and easy-to-use tools, Derayah allows users to explore, compare, and track funds that may align with their financial preferences. The platform offers access to transparent fund data, from monthly distributions to transaction patterns, helping users make more informed choices at their own pace.
At Derayah, we aimto make investing more accessible, flexible, and digitally driven. Whether you’re looking to diversify or are just getting started, the platform provides one possible way to manage your investment journey, on your terms, whenever and wherever you choose.
Disclaimer: All information provided is for educational and awareness purposes only and does not constitute a recommendation or invitation to make any investment decision. Past performance is not indicative of future results. Please consult your financial advisor before making any decisions.
Derayah Financial is licensed by the Capital Market Authority under license number 27-08109.
