Dubai - MENA Herald: Equitativa (AD) Limited (“Equitativa”) today announces the launch of The Residential REIT (IC) Limited (“The Residential REIT” or the “REIT”), the first Sharia compliant residential Real Estate Investment Trust in the UAE. This is the second REIT in the UAE after Emirates REIT (CEIC) Limited (“Emirates REIT”), launched and managed by the Equitativa Group.
The Residential REIT’s founding shareholders, Al Hamra Real Estate Development LLC (‘Al Hamra’) and National Bonds Corporation PJSC (‘National Bonds’), contributed a portfolio of high quality income producing residential properties.
Al Hamra contributed 371 residential units consisting of a mix of apartments, duplexes, townhouses and villas located in Al Hamra Village, Ras Al Khaimah. The portfolio comprises of 472,250 sq ft of net leasable area in one of the most attractive communities in the Emirate. It has a strong mix of both private tenants and corporate tenants with varying tenures.
National Bonds contributed a building with 112 units made up of studio and one-bedroom apartments, collectively known as ‘Barton House’ located in Dubai’s Motor City. These units comprise a total of 86,239 sq ft of net leasable area.
The contributed properties have 95% occupancy and a total value of AED 418 million.
An additional property valued at AED 99 million has already been secured, bringing the total portfolio value to AED 517 million.
An individual cash investor also invested in the Residential REIT.
The Residential REIT, established and managed by Equitativa, is incorporated in the Abu Dhabi Global Market (‘ADGM’) and regulated by the Financial Services Regulatory Authority. It is a Sharia compliant Real Estate Investment Trust, which distributes at least 80% of its net income to shareholders. Equitativa expects to raise further funds allowing the REIT to buildup a large portfolio in order to prepare for an IPO.
Equitativa (AD) Limited is a part of the Equitativa Group which also owns Equitativa (Dubai) Limited, the founder and REIT Manager of Emirates REIT. Emirates REIT is the UAE’s first regulated Sharia Compliant Real Estate Investment Trust, listed on Nasdaq Dubai with a AED 2.8 bn portfolio of office buildings, schools and retail assets.
The Residential REIT was launched after the grant of an exclusive Emiri decree in October 2016 which permits current and future REITs and other collective funds managed by Equitativa to invest in Ras Al Khaimah onshore real estate. This follows a similar Ruler’s decree granted to Emirates REIT in 2013 by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, for onshore real estate in Dubai.
Sylvain Vieujot, Chairman of Equitativa, said: “We want to thank Al Hamra and National Bonds for their trust and partnership with Equitativa. We believe this is the right time to enter the residential market and launch The Residential REIT. Residential yields are attractive in the current environment and are expected to provide medium term upside. There continues to be significant interest in REITs across the region from both institutional and private investors.”
Benoy Kurien, General Manager of Al Hamra Group, said: “The decree issued by His Highness Sheikh Saud, the Ruler of Ras Al Khaimah allowing Equitativa to invest in the Emirate’s onshore property pool has enabled us to put our strong and high yielding Al Hamra real estate portfolio into this REIT structure as well as open up the Emirate to institutional investment. There continues to be good investment opportunities for residential commercial and hospitality assets in Ras Al Khaimah and we look forward to supporting Equitativa in sourcing such assets in the future.”
Mohammed Qasim Al Ali, Chief Executive Officer of National Bonds, said: “REITs are a perfect structure for us as they have many of the characteristics of our unique savings & investments scheme. By putting our real estate assets into a REIT structure, with a proven REIT Manager, we can combine consistent asset growth with strong dividend cash returns. We look forward to developing a strong relationship with Equitativa as they build out the portfolio over the coming years.”
HE Ahmed Ali Al Sayegh, Chairman of Abu Dhabi Global Market, said: “We congratulate Equitativa on launching its second REIT and setting new benchmarks in the REITs market. As an international financial centre, ADGM understands the importance of providing an efficient and well-regulated framework that offers a comprehensive suite of investment vehicles, such as REITs and Business Trusts, to support the needs of businesses and investors. The development of the REIT industry in the UAE facilitates equity financing in real-estate and unlocks value in the underlying real estate investments. We welcome more innovative issuers like Equitativa to join the ADGM family and take advantage of the benefits of our investment offerings and the vibrancy of our financial centre.”
