“We have a lot of infrastructure, for instance on the Palm Jumeirah, that could be included in the trust,” says Nakheel chief financial officer Kar Tung Quek.

The trust would function in a similar way to a listed real estate investment trust (Reit).

Investors would buy and trade shares in the fund, which represents a pool of illiquid assets, and receive dividends from income generated by the assets.

Bahrain-based private equity firm Arcapita is structuring an infrastructure fund to list on the Singapore Exchange.

In addition to the infrastructure trust, Nakheel will launch its first residential Reit by in the first half of 2008.

It plans a dual listing for the Reit by floating the trust on either the London, Singapore or Sydney bourses, as well the Dubai International Financial Exchange (DIFX). Currently, there are no Reits listed on the DIFX.

“Singapore is favourable from a tax consideration,” says Quek. “Reits are doing well there and it helps if you go to a market where there are benchmarks.”

It is also looking at launching an unlisted property fund that is targeted at a small group of institutional investors.

“There are a lot of high net worth individuals and corporates that would like to develop a relationship with us,” says Quek.

The trusts are part of the com-pany's attempts to raise capital from new sources.

“We are looking to diversify our sources of financing and are also keen to look at project finance,” says Quek. “With the new escrow law [in the UAE] it is quite timely and banks feel more comfortable doing project finance.”

The new escrow law protects property buyers against defaulting developers. Funds paid for off-plan property are held in an account controlled by the Dubai Land Department and only released once all property in the development is registered in the buyers' names.

The company is also raising capital through Islamic bonds.

Subscription to Nakheel's second sukuk (Islamic bond), a $750m issue that was launched on 4 December and marketed globally, closes in January 2008.

The developer is likely to stage an initial public offering (IPO) of shares by the end of 2009 when its first sukuk matures. About one-third of the $3.25m sukuk, which is listed on the DIFX, is convertible into shares in the case of an IPO.

“In the event we do not IPO, we have to pay an additional 200 basis points [to the sukuk holders],” says Quek. “That is a lot so there is an incentive for us to look at an IPO.”

The Dubai International Financial Centre (DIFC) is one of the few jurisdictions globally that regulate Reits. The centre, which consists of about 20 completed buildings, is expected to issue its own Reit.