Two property developers from the UAE are planning to list Islamic real estate investment trusts worth a combined 2 billion ringgit ($656m) in Malaysia this year, an exchange official said.

The companies will be the first from the Arabian Gulf to sell Islamic REITs in the Southeast Asian nation, said Raja Teh Maimunah, global head of Islamic markets at Bursa Malaysia, which manages the country’s stock and bond exchanges. The portfolio of properties include residential and commercial real estate in the UAE, she said.

Property prices have slumped more than 60 percent in Dubai, the second-biggest of the seven UAE sheikdoms, since their peak in 2008 as the global financial crisis that froze credit markets slashed demand.
Malaysia is attracting overseas investors from the Middle East as the political turmoil in the region boosts appetite for assets in the world’s biggest market for sukuk, or Shariah-compliant bonds.

“Liquidity becomes a challenge for them after the global financial crisis and so they’re looking at our market,” Raja Teh said in an interview in Kuala Lumpur on Tuesday.

Dubai has submitted a formal application to Malaysian authorities to issue ringgit-denominated sukuk locally, she said, declining to give more details. Gulf Investment Corp., the investment company owned by the six Gulf Cooperation Council states, sold 600 million ringgit of Islamic bonds in January.

Dubai may sell bonds this year and a Malaysian offering is possible, Abdulrahman Al Saleh, director general of the emirate’s Department of Finance, said December 14, two months after Malaysian prime minister Najib Razak announced Dubai’s proposal for a multi-currency sukuk programme.