The Future of Islamic Real Estate Investment Trusts in Stimulating Financial Markets

Abstract

The study aims to investigate the role of Islamic real estate investment funds in stimulating the Saudi economic market. The study focuses on the performance of these funds from 2018 to 2022, assessing their contribution to the wider Islamic capital market. To achieve its objectives, a descriptive and analytical approach was used, which included the collection and analysis of data related to Islamic investment funds. This approach has made it possible to conduct a comprehensive study of the global evolution of these funds and their economic performance indicators. The study also included a literature review to contextualize its findings within existing research. What distinguishes this study from previous research is its special focus on the Saudi context and the detailed analysis of Islamic REITs as a distinct financial instrument. While other studies have explored Islamic finance extensively, this research focuses on the unique characteristics and performance metrics of Islamic Real Estate Investment Trusts, providing a more accurate understanding of their impact on the financial market. The main results of the study indicate that Islamic investment funds effectively attract inactive savings and direct them to productive economic activities, and thus contribute to the real investments that are in line with Islamic principles. In addition, the research highlights that Islamic real estate investment funds gain investor confidence, and often provide returns that exceed the averages of the market. The size of the assets of these funds significantly affects the measures of their performance, which confirms their potential as applicable investment options. In general, the study concluded that Islamic real estate investment funds play a crucial role in enhancing trading activity and stimulating the Saudi economic market, especially during periods of economic recession.

Keywords

• investment funds
• islamic real estate investment trusts
• stock market
• real estate fund performance