ENBD REIT, the Nasdaq Dubai-listed real estate investment trust, has announced that it has arranged a three-year, $75 million Islamic finance facility with Standard Chartered.

Part of a $45 million tranche of the loan will be used partly to repay existing debt, which will lower the REIT's financing costs, but around $30 million will also be used to support potential acquisitions, it said in a statement to the Nasdaq Dubai exchange.

It also said that an option to upsize this facility, known as Murabaha financing, to $100 million exists.

In the statement, Emirates NBD Asset Management's head of real estate, Anthony Taylor, said the facility "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".

The said that the REIT's current strategy was "primarily focused on alternative assets", adding that it was keen to make acquisitions in the industrial, logistics and healthcare sectors.

ENBD REIT was floated on Nasdaq Dubai in March 2017 and has invested $150 million in office and alternative assets. Assets bought to date include the Souq Extra Retail Centre in Dubai Silicon Oasis, The Edge office building in Dubai Internet City and the Uninest student accommodation building near Dubai Academic City.

The trust's net asset value has declined by around 3.7 percent in the first six months of this year to $289 million - down from $300 million at the end of last year - but its share price has plunged 35 percent in the year to date, meaning it has a market capitalisation now of just $163.6 million.

In August, the REIT's management issued a statement saying it is "actively pursuing options to mitigate downward pressure" on its share price, which it blamed both on negative sentiment on the Dubai real estate market, as well as a lack of liquidity in its shares.

Earlier this month, it convened a general meeting for November 27 at which it is proposing to reduce the company's share capital to just over $203.5 million, from just over $288 million currently. It plans to do this by cancelling over $84.5 million worth of shares, and using the money generated to create a distributable reserve, that will either be transferred to the company's retained earnings, or used to buy back shares, pay a dividend to shareholders or "for any other lawful purpose which the directors may deem to promote the success of the company", the note convening the general meeting explained.

The proposal will be voted on by shareholders at the general meeting.

(Reporting by Michael Fahy; Editing by Shane McGinley)
(michael.fahy@refinitiv.com)


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