Real Estate business is common in the Saudi Arabia and there are several companies that are registered in the stock exchange as REIT businesses that are listed and increase the capital of USD 3.7 billion that is a remarkable increased as compare to previous year. Real Estate Investment Traded Funds known as REITs, are the financial instruments that are available to different kinds of investors to invest in the business with their risk handling and to achieve the goals of the ownership in the market. REIT’s could invest in any form such as local global or regional but not exceeding 25% of the total funds of the assets. REIT’s are exchanged on the list just like other organizations that is divided in different people to capital the company and distribute profit among them (Emoh & Nwachukwu., 2011).

With the expansion of business there are many activities that are increased in the market. The size of the IPO is 65,152,440 units which equals SAR 651,524,400 in the market portfolio. The basic purpose of the investment is to create portfolio through the acquisition of the business that are being used in the development of the business with the funding strategies. The companies are listed in the tawadul have different kinds of the pros and corns that are meaningful in the investment in the real estate business.

Main body of Real Estate finance and investment Project

There is an effort to increase the minimum capital requirement for new investment that is favorable in the development of the REIT market that is considered as main objective of REIT market in the Saudi Arabia. From a valuation point of view of the assets owned by companies, Saudi-based REITs have seen their cost to net asset valuation (NAV) thin in the course of recent years with REITs presently exchanging at a normal of 9% markdown to NAV, a figure that is in accordance with progressively develop markets for the development of REIT. On a positive note, the file following the presentation of Saudi REITs indicated sound execution in the initial ten long periods of 2019, after a remarkable drop in 2018. The record rose by over 5% during this period, demonstrating that the market execution of Saudi REITs is most likely turning the corner following a remedy stage that has offset beginning lightness (Mayer & Somerville, 2006).

Working performance of Real Estate finance and investment Project

The initial trending to contribute in the NAV that is based on large number of amount is based on the capital seeking to handle the risk in the real estate business. According the experience of past years, prices are near to the closed markets and Saudi companies are trading on 9% discounted to their NAV. Increasing investment and higher rates are attracting the investors to invest in the real estate by focusing on the fundamentals.

The expanding market of the real estate is a favorable platform to invest in the market to gain the share from business by mitigating some risk. Investors are willing to adopt the benefits from the business that could be prevailing for long time off period. The portfolio that is invested in the market of REIT is most likely to diversify with the changing environment of the business. Diversified units are consolidated with the dominance on the market that is based on the lack of the projects structure that may oppose to the real estate stock. Following are the characteristics of funds that are invested in the real estate business (Oppenheimer, 2002).

· Bonyan REIT during its placement featured

· Targeted Gross Initial Yield (2018) 7.85%

· Targeted Net Yield (2018) 7.26%

· Total Fee (of NAV) 0.59%

· Management Fee (of NAV) 0.50%

The main objective of funds investing in the real estate asset in the Saudi Arabia and Gulf countries are to generate periodic income charge from rent that must be distributed in the semi annually profits for the business holders. The basic purpose of the investment is to create portfolio through the acquisition of the business that are being used in the development of the business with the funding strategies. The investment that is made in other business do not included in the investment of real estate business there are difference that is based on the nature of investment. Funds in the REIT are occupied with the underlying assets with the different rates such as:

1. Al-Rafiah Villa Compound 100%

2. Maathar Villa Compound 100%

3. City Walk apartments 64%

4. Courtyard Marriot Hotel 39%

5. Marriot Residence Inn apartments 60%

6. AlRashid Residence apartments 50%

7. AlRashid Strip Mall 0%(new)

8. AlRashid Mall 77.6%

9. AlRashid Mega mall 99.4%

Net Yield for business of RIET in Saudi Arabia is required to distribute 90% of their profits to the unit holders who have invested in the units, and 10% profit is allowed to reinvest in the REIT. With the increasing gain in the market, dividend yield is becoming key factor in the performance of the investment that is determined by the investors (Rocha, Salles, A.Sardinha, & P.Teixeira., 2007). Calculations of REIT in Saudi Arabia are almost 7.3% that is an attractive represented for the investors to invest in the real estate business. Followings are the well above the average dividend yield offered by some of the major global REITs calculations that are equal and above our previous dividend yield estimates in the analysis.

Years 2018 2019 2020 2021

Net yield rate 7.26% 7.70% 7.94% 8.17%

There is list about the dividend yield that is being earned by the companies that are engage in the investment of the business in real estate.

It is focused on that all out yearly reserve expenses to not surpass 0.59% of NAV, which incorporates the store the board charge of 0.50% every year of NAV and is a remarkable performance in the real estate market. Interest in the Fund incorporates a few dangers or the risks, for example, business part fixation chance, nonappearance of authentic operational record, dependence on the Fund's foremost representatives, liquidity chance, exchanging beneath advertise esteem, (Grossi & Soverchia, 2011) all factors are just danger of expanding the Fund's capital and dangers of not accomplishing the uncovered degrees of profitability. Membership is accessible to Saudi people and their wards, Including establishments, organizations, speculation reserves, government elements and other lawful elements situated in the Kingdom of Saudi Arabia what's more, entirely claimed by characteristic people who hold Saudi nationality. Following are the unit or resources in which real estate business units could be transected in the public such as:

· SFC - Fund Manager

· National Commercial Bank

· Al Rajhi Bank - Receiving Bank

· Banque Saudi Fransi

· Al Riyad Bank

· Samba

In the light of posting, the units can be exchanged on Saudi Stock Exchange Market (Tadawul) and there may be variations in the transactions (Alesani, Jensen, & Steccolini, 2012). As concerned with the unit distributers there is also list of companies that are engage in the investment business.

There are some characteristics that are owned by the REITS businesses. Every real estate that is required to invest money in the market must follow the following characteristics:

· Contingent salary: If they are gainful, REITs are required to convey at least 90% of the assets net benefits yearly to its unit holders.

· Extra speculation opportunity and expanded broadening.

· Simple to put resources into as REITs are like values.

· High straightforwardness as REITs must unveil periodical fiscal summaries like the other recorded values.

Listed companies of Real Estate finance and investment Project

Listing in the stock exchange is not simple as it is look like, there must be some requirements that must be fulfill before entering in the list. The company must be closed ended type and there must be minimum 50 investors in the company. Initial investment is started from SAR 100 million and nominal value per unit is SAR 10 per unit (Mhaka, 2014). As concerned with the assets ownership, assets must be registered with the name of holder. The borrowing limit of the funds must not be increasing 50% of the total asset value of the funds in the investment. There must be at least 75% of the funds of total asset in the audited financial statements that are evaluated in the financial statements of the company.

Working on the large scale in the business real estate markets in the world is actively trading on the stock market with the Gulf Countries Council GCC that is adapted with the markets working in the stock market. REIT’s businesses are facing down due to instability in the oil prices. According to the current estimation, Saudi Arabia is working in real estate business with Bahrain, United Arab Emirates to deal with the investment.

The manager of the company is prohibited in the investment in vacant places. The store supervisor is permitted to contribute up to a limit of 25% of the reserve's all out resources esteem as indicated by the last reviewed budget summaries in land advancement whether on genuine bequests claimed by the store chief or not, and to revamp or redevelop these properties. The store manager will not contribute over 25% of the reserve's all out resources regard as indicated by the last evaluated fiscal statements in properties outside the Kingdom. In any event 30% of the all out REIT units are claimed by unit holders from people in general.

As concerned with the question how to invest in the REIT’s, the individuals could purchase the shares in open exchange or by investing in the mutual fund that are share of the listed on the stock exchange (Alesani, Jensen, & Steccolini, 2012). There are some specifications in the area of investment and the units are distributed among the areas according to the specialty of the area. Real estate is for both small and large investment to selling large amount to the investors to participate in the market. It allows diversification to the portfolio investing in the company that is managing the team that based in different locations of the assets. A few organizations speak to rewarding chances, while a few organizations may speak to a lot of hazard or poor worth in the market.

Financial specialists need to take a gander at a REIT's presentation regarding net resource esteem development and profit installment history, current portfolio creation and execution, the supervisory crew and uncertain arrangements, and have an understanding of the possible execution of the property cabinet and the economy. Subsequent to finishing an intensive and top to bottom evaluation of the REIT, speculators can take part with what they can bear to contribute in. Another stage of the investment, which permits little financial specialists to share in the property showcase, is crowd funding. A generally new idea, crowd funding involves the pooling of assets by a gathering of people to fund activities, for example, land speculation ventures that are dealing in the business of land. This is generally done by means of the web that is based on the REIT.

There are obviously advantages that are attained by the investors by investing in the real estate business. Investor could invest in the market with very small amount of the money and efficiently could increase the share with the passage of time to meet the requirements of the business. In a specific project there are more chances to increase the possibility of the portfolio that is limited up to a certain limit in the portfolio investment. As there is limit in the investment so there are also limit in the risk that is bear in the investment in the portfolio. For developers, there are more chances to invest in the crowd funding that provide different sources of the investment (Cohen, 2005).

Risk in REIT of Real Estate finance and investment Project

In above discussed there are variety of investment in the crowd funding but still it is not without risk’ there are many projects that are based on the crowd funding but still they are involved with the risk that have to bear by the investors in the market. Investors will be front line fighters in the market who are dealing with the investment in the real estate business. Furthermore, investing in the REIT is restricted factor in the investment of other industry that creates difficulty for the investors such as position of liquidity. In real estate business there are different kinds of risk in which liquidity is a major risk that could be faced by the investors in the market. The risk will be handled by the investors carefully that is required to determine in the type of required in the investment that are regardless of the size of investment (Sait, Al-Tawil, & Hussain., 2004).

Pros and cons of Real Estate finance and investment Project

There are different discussions that are related in the favor of real estate business working and explain that it is more beneficial for the companies or individuals to invest in the real estate business as there are a number of privileges that are gained by the investor in the real estate business (Xu & Quaddus, 2010). People who want to invest in low risk prefer to work with the stock market of REIT. There are some pros and cons that are related to the investment in the real estate business as explained below:

· Higher return: as above discussed that REIT’s distribute 90% of its total profit to the investors therefore it is a investment of higher profit in the market.

· High liquidity: it is not forcefully to invest in the real estate that is based on the long term interval to sell and buy the properties that are totally based on the daily basis.

· Transparency: according to the instructions of law, REITs are based on the rules to disclose the information regarding the money invested in the company.

· Management expertise: management is hired to manage all the function in the investment to get the experienced. Land Investment Funds, in any case, save you the difficulty as all the properties you put resources into are overseen by experts.

· Dispersed hazard: as promising as putting resources into land may be, the results of its disappointment are crushing as you would lose a colossal single amount of cash for this situation. This is diverse with the speculation trusts, be that as it may, since the hazard is separated among different proprietors.

With the mentioned advantages, there is an opportunity to expand the real estate business in the market but it also has some disadvantages in the investment in real estate business. Followings are the disadvantages that are related investment in REIT:

· Low Growth: Because of the high profit a land venture trust needs to pay, it has an exceptionally little level of its pay left to spend on and reinvest in developing the business.

· High Tax Rate: REIT profit is burdened as customary salary at a rate that is altogether higher than the rate at which profits are regularly held back.

· No control: although financial specialists become more acquainted with on ordinary premise how their speculation is being dealt with, they don't control how it is being overseen and they surrender the control a land owner would regularly have.

Conclusion of Real Estate finance and investment Project

The report is concluded with the final position about the investment in the real estate business in the investment. REIT's are traded on the rundown simply like different associations that is isolated in various individuals to capital the organization and disperse benefit among them. The essential reason for the speculation is to make portfolio through the procurement of the business that are being utilized in the advancement of the business with the financing methodologies. The organizations are recorded in the tawadul have various types of the stars and corns that are important in the interest in the land business (A.Al-Somali, Gholami, & Clegg., 2010).

The organization must be shut finished sort and there must be least 50 speculators in the organization. Beginning speculation is begun from SAR 100 million and ostensible worth for each unit is SAR 10 for each unit. As worried about the benefits proprietorship, resources must be enlisted with the name of holder. The getting furthest reaches of the assets must not be expanding half of the complete resource estimation of the assets in the speculation. Financial specialist could put resources into the market with modest quantity of the cash and effectively could build the offer with the progression of time to meet the prerequisites of the business. In a particular task there are more opportunities to build the chance of the portfolio that is restricted up to a specific breaking point in the portfolio investment.

There are various conversations that are connected in the kindness of land business working and clarify that it is progressively valuable for the organizations or people to put resources into the land business as there are various benefits that are picked up by the financial specialist in the land business. Individuals who need to put resources into generally safe like to work with the securities exchange of REIT.

References of Real Estate finance and investment Project

A.Al-Somali, S., Gholami, R., & Clegg., B. (2010). E-business adoption in Saudi Arabian private sector. . In 2010 International Conference on Information Society (pp. 376-382). IEEE.

Alesani, D., Jensen, G., & Steccolini, I. (2012). "IPSAS adoption by the World Food Programme: an application of the contingency model to intergovernmental organisations. International Journal of Public Sector Performance Management , 2 (1), 61-80.

Cohen, W. A. (2005). The marketing plan. John Wiley & Sons.

Emoh, F. I., & Nwachukwu., C. C. (2011). "Critical Issues in real Estate finance as an index in building construction project management success in Nigeria. American Journal of Social and management science , 2, 76-90.

Grossi, G., & Soverchia, M. (2011). "European Commission adoption of IPSAS to reform financial reporting. Abacus , 47 (4), 525-552.

Mayer, L. B., & Somerville, C. T. (2006). Irreversible investment, real options, and competition: Evidence from real estate development (No. w12486). National Bureau of Economic Research.

Mhaka, C. (2014). "IPSAS, a guaranteed way of quality government financial reporting? A comparative analysis of the existing cash accounting and IPSAS based accounting reporting. International Journal of Financial Economics, , 3 (3), 134-141.

Oppenheimer, P. H. (2002). A critique of using real options pricing models in valuing real estate projects and contracts. Briefings in Real Estate Finance: An International Journal , 2 (3), 221-233.

Rocha, K., Salles, L., A.Sardinha, F. A., & P.Teixeira., J. (2007). "Real estate and real options—A case study. Emerging Markets Review , 8 (1), 67-79.

Sait, S., Al-Tawil, K., & Hussain., S. (2004). E-Commerce in Saudi Arabia: adoption and perspectives. Australasian Journal of Information Systems, , 12 (1).

Xu, J., & Quaddus, M. (2010). E-business in the 21st Century: Realities,. Challenges and Outlook (Vol. 2). World Scientific.