ENBD REIT buys retail centre for Dh210m in Dubai

The acquisition will diversify the investment vehicle's rental income

Reits have been gaining traction in the Saudi Arabia and the UAE, the two biggest Arabian Gulf economies, as investors hunt for safe exposure to the property market. Antonie Robertson / The National

ENBD REIT, the Sharia-compliant real estate investment trust managed by Emirates NBD Asset Management, on Tuesday said it  acquired a retail centre in Dubai for Dh210 million as part of plans to diversify its rental income and portfolio.

The REIT bought the centre in Silicon Oasis from Souq Extra, which launched the development in January, it said in a statement on Nasdaq Dubai where it is listed. Rental income from the community centre, which has a 36,000 square feet gross leasable area including 42 retails units, is guaranteed for two years.

“This acquisition diversifies ENBD REIT’s asset mix into retail and will enhance the rental income return profile of the portfolio,” said Anthony Taylor, fund manager for real estate at Emirates NBD Asset Management

“In just nine months, we have completed the full allocation of the capital raised at listing and fully committed our existing finance facility in line with our growth strategy to acquire assets that are 100 per cent occupied.”

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Reits have been gaining traction in the Saudi Arabia and the UAE, the two biggest Arabian Gulf economies, as investors hunt for safe exposure to the property market. Trading in Reits is similar to stocks and bonds on an exchange, paying out dividends from rent to investors.

ENBD REIT, which was launched in March, has acquired this year Uninest student accommodation in Dubailand, South View School in Remraam Community and The Edge office building in Dubai Internet City. At the end of September, the Reit had a net asset value of US$295m. It announced in October that $105m proceeds from its IPO were fully invested and it has also fully committed its $191m Islamic finance facility.

Invest AD, the Abu Dhabi investment management firm is the latest among the UAE firms to unveil plans for setting up real estate investment vehicles. The company in October said it will launch a Reit in a joint venture with Canada's Brookfield Asset Management, targeting investment opportunities in the UAE.

Brookfield, which has $250 billion of assets under management, will develop other real estate investment products in collaboration with Invest AD in addition to the Reit, which will be formed under the regulatory framework of Abu Dhabi Global Market, the capital’s financial free zone.

Emirates REIT, which is managed by Equitativa Dubai, is the first such investment vehicle to be listed in the UAE on Nasdaq Dubai.