Emirates NBD unit says reit listing is oversubscribed

Shares in the UAE’s second real estate investment trust will be listed on Nasdaq Dubai this week at an offer price of US$1.11.

Emirates NBD Asset Management, the company behind the planned listing, said that the offer had been oversubscribed, receiving a “better-than-expected response from regional investors”.

The company said that the listing price represented a 7.5 per cent discount to net asset value. Emirates NBD Reit is expected to be listed on Nasdaq Dubai on Thursday. Based on the offer price, the company’s market cap is expected to be about US$282.4 million.

The company said it would issue 94,594,595 new shares to institutional investors at the offer price, which represents about 37.2 per cent of ENBD Reit’s issued share capital.

“Our primary investment objective is to generate attractive income returns and capital appreciation from real estate assets,” said Anthony Taylor, Emirates NBD Asset Management’s real estate fund manager. “We are targeting opportunities that offer net yields in line with, or greater than, previously achieved returns. We manage our assets with a focus on enhancing their value and we have a pipeline of attractive acquisition opportunities that will further diversify our portfolio and allow us to benefit from economies of scale.”

Earlier this month, the bank-owned asset manager announced that its 872,518 square feet income-producing portfolio will be transferred to the new ENBD Reit from a Jersey-based open-ended real estate fund that was originally established in 2005.

The asset manager said that the portfolio includes the 28-storey Al Thuraya Tower in Dubai Media City, the 10-storey Binghatti Terraces housing complex in Dubai Silicon Oasis and the 13-storey Arabian Orxy House complex in Barsha Heights, which together make up nearly two-thirds of the fund’s rental income.

The portfolio also comprises the mixed-use Burj Daman tower in DIFC, two commercial buildings in Dubai Healthcare City and two residential towers in the Remraam housing district in Dubailand leased as staff housing to the Media Rotana hotel.

Reits are common in other parts of the world, where they are often sold to investors as a way of putting money into the property market without the difficulties of direct investment. Reits buy properties such as large office buildings and shopping centres, manage them and distribute the rental yield to investors.

In 2014, the UAE’s first reit, Emirates Reit, was floated on Nasdaq Dubai by fund manager Equitativa.

In February, Equitativa announced plans to create the country’s first residential real estate fund. The company is also looking to establish Reits specialising in hotels, logistics and sporting assets.

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