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Financing will facilitate further portfolio diversification through acquisitions
Dubai: ENBD REIT (CEIC) Limited (“ENBD REIT”), the Shari’a compliant real estate investment trust managed by Emirates NBD Asset Management Limited, has confirmed a USD 75 million (AED 275 million) Murabaha finance facility with Standard Chartered Bank for a term of three years with an accordion option to upsize the facility to USD 100 million. The new facility will support the REIT’s focus on portfolio diversification through further acquisitions, to maximise income returns and mitigate risk.
The Shari’a compliant facility is in two tranches. Tranche A (USD 45 million at total drawdown) will partially repay ENBD REIT’s existing debt, following oversight approval, thereby delivering a material benefit to the REIT’s finance cost. Utilization of Tranche A will not affect the Loan-to-Value (LTV) ratio of 38% and results in a reduction in profit costs that better aligns with ENBD REIT’s investment strategy and target returns. Tranche B, of USD 30 million, will be available to support potential acquisitions and will increase LTV to 42%. The facility has a bullet payment at maturity.
Anthony Taylor, Head of Real Estate at Emirates NBD Asset Management, said:
“The facility that we have secured with Standard Chartered Bank will support our core objective of delivering value and income to investors, by enabling us to complete strategic acquisitions that boost the diversity and size of our portfolio, as well as reducing our cost of financing. At present, we are primarily focused on alternative assets and are especially keen to pursue opportunities in the industrial, logistics and healthcare sectors.”
ENBD REIT, which has been listed on Nasdaq Dubai since March 2017, offers investors access to Dubai’s institutional real estate market. Over the past 24 months the fund has invested USD 150 million in properties across alternative and office asset classes. The REIT’s management is seeking to increase its alternative holdings as it pursues new acquisition opportunities.
With its management in Dubai, ENBD REIT is a Shari'a compliant, real estate investment trust investing in income generating real estate, with a primary focus on the UAE. ENBD REIT is managed by Emirates NBD Asset Management, an award-winning asset manager in the UAE, with approximately USD 4.3 billion in Assets under Management (AuM).
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