ENBD REIT Secures USD 177 Million Facility From Mashreq Bank
ENBD REIT (CEIC) PLC (“ENBD REIT”), the Shari’a compliant real estate investment trust managed by Emirates NBD Asset Management Limited, has confirmed a USD 177 million (AED 650 million) Shari’a-compliant financing facility with Mashreq Bank. The facility will refinance USD 134.5 million (AED 494 million) of the REIT’s existing debt – reducing its cost of financing – as well as provide additional funding for acquisitions and corporate purposes
The 12-year facility is profit only for the first 4 years, amortising 80% during the following 8 years with a 20% balloon payment at the end of its term. At 3-month EIBOR + 2.65% profit margin, the new facility will reduce ENBD REIT’s overall cost of debt.
Anthony Taylor, Head of Real Estate at Emirates NBD Asset Management, said:
“The facility that we have secured with Mashreq Bank is important for both refinancing our existing debt – to deliver important cost savings for the REIT – as well as to support our acquisitions programme. Our intention is to diversify our holdings by increasing allocation to the alternative segment, where we are seeing most growth and resilience in light of current market conditions.”
As at 31st March 2019, ENBD REIT's Net Asset Value ("NAV") was USD 270 million or USD 1.08 per share and the total value of its property portfolio was USD 450 million. Total loans stood at USD 180 million with a Loan-to-Value ("LTV") ratio of 40.
Portfolio occupancy of 86% has been supported by an effective leasing strategy, which has achieved 84% occupancy in the office portfolio, 81% occupancy in the residential portfolio and 100% occupancy in the alternative portfolio. The alternative portion of the portfolio includes student accommodation, education and retail assets, with ENBD REIT’s acquisition strategy seeking to expand into new asset classes including industrial, healthcare and education.
On their part, Ahmed Abdelaal, Executive Vice President, Head of Corporate and Investment Banking Group, at Mashreq Bank, said:
“We are pleased to partner with ENBD REIT on this transaction and provide them with a customized solution to accelerate their future objectives. As more and more institutional investors are looking for strategic assets in the real estate sector with the objective of long-term gains, we believe this is the right time to support ENBD REIT’s refinancing and growth plans. We see this facility as providing them with a platform to further develop their Shari’a-compliant portfolio of real estate assets and in turn benefit the UAE local economy over the long-term.”
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.
ENBD REIT is a Real Estate Investment Trust established with the objective of generating a regular dividend income stream for investors, typically derived from income from investment properties, usually in the form of rent, with the additional opportunity for capital appreciation and increases in the value of the equity.
The Fund Manager, Emirates NBD Asset Management, is one of the leading asset managers in the GCC region with approximately US$4.2 billion assets under management as at 31st March 2017. It is a wholly owned subsidiary of Emirates NBD Bank PJSC, is based in the Dubai International Financial Centre (DIFC) and regulated by the Dubai Financial Services Authority (DFSA). The Fund Manager provides a wide range of investment solutions, from in-house managed funds to tailor-made discretionary solutions. It manages funds across a variety of asset classes, including MENA equity and global fixed income, global risk profiled solutions, real estate, and a wide range of Shari'a compliant instruments, structured to cater for diverse risk appetites.