Trading begins in ENBD Reit shares following $105 million IPO

Trading in shares of the UAE's second real estate investment trust - Emirates NBD Reit - began on Nasdaq Dubai on Thursday following its $105 million initial public offering.
Shariah-compliant Reit - a type of property fund that provides investors income from the properties in which it invests through dividends - is managed byEmirates NBD Asset Management and established in Dubai International Financial Centre.
The UAE's first Reit, Emirates Reit, was floated on Nasdaq Dubai in 2014 by Equitativa. ENBD Reit offered 94,594,595 ordinary shares, or 37.2 per cent of the issued share capital, to institutional investors at a price of $1.11 per ordinary share. Trading started under the ticker symbol ENBDREIT. The fund manager said it intends to use the proceeds of the IPO to fund acquisitions of high quality, income-generating real estate assets and make improvements to existing properties as part of its active asset management strategy.
The fund manager has identified a pipeline of opportunities to invest in commercial and alternative real estate assets. Based on the offer price, ENBDReit will have a market capitalisation of around $282.4 million at admission.
Shayne Nelson, group chief executive officer of Emirates NBD, said the strong interest the offer received from GCC-based investors has been a clear testament to the appetite that exists for ENBD Reit's equity story. "We are looking forward to the continued deployment of its successful asset management and acquisition strategy."
Abdul Wahed Al Fahim, Chairman of Nasdaq Dubai, said the listing reflected Nasdaq Dubai's ability to provide issuers with an effective platform for capital-raising including access to international and regional investors, global visibility, and first class regulation.
Hamed Ali, Chief Executive of Nasdaq Dubai, said the Reit's successful listing demonstrates the close links between the UAE's property sector and its capital markets infrastructure. "We look forward to further listings from regional and international issuers active in a range of sectors, which seek a listing on the international exchange based in the business and financial hub of the region."
ENBD Reit, a closed-ended investment company, seeks to invest in a diversified portfolio of Shari'ah-compliant real estate in the UAE.
The Reit invests in predominantly income generating real estate, with the objective of providing investors with a regular source of income (by way of annual dividends of at least 80 per cent of net audited annual income) and potential capital appreciation.
Earlier this month, Emirates NBD Asset Management announced that its 872,518 square feet income-producing portfolio would be transferred to ENBD Reit from a Jersey-based open-ended real estate fund that was originally established in 2005.
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.
Tariq bin Hendi, Director of ENBD Reit, said the rationale for the listing was to improve liquidity and allow greater flexibility in managing the Reit. "Our improved capital structure means ENBD Reit will have less of a requirement to retain cash for the purposes of managing liquidity in the event of investor withdrawals, and will allow us to remain more fully invested - thereby achieving long-term returns for our shareholders," said Hendi. Emirates NBD Capital Limited and EFG Hermes UAE Limited were joint global coordinators and joint bookrunners for the IPO.
- issacjohn@khaleejtimes.com