Dubai: Significant interest from UAE and GCC institutional investors as well as some from the UK ensured Emirates Reit (real estate investment trust) share offering was over-subscribed 3.5 times.
The base offer was raised from $150 million (Dh551 million) to $175 million to accommodate demand.
In all, 128.67 million shares were issued at $1.36 apiece, which implies a market capitalisation of around $381.2 million and a free float of 46 per cent. The listing, on Nasdaq Dubai, will be from April 8 under the ticker symbol REIT. Emirates Reit also had a provision to exercise over-allotment arrangements of up to 19,3 million additional shares.
The proceeds from the share offer will be used to fund “future acquisition opportunities”, while a portion will be “directed towards investment in existing assets”, according to a statement issued by the company. In fact, some of the likely assets have already been short-listed, it added.
“Investor demand in the Emirates Reit offer had a lot to do with how it managed to show a consistent track-record of operations and its portfolio of profit-generating assets,” said Krishna Murthy, general manager at Dubai International Securities. “Another plus for Emirates Reit is the stature of its shareholder base, which includes Dubai Islamic Bank (DIB).”
Emirates REIT is managed by a Reit Manager, which is a joint venture between DIB and Eiffel Management Ltd. Prior to the share offer, the Reit had brought on board EFG Hermes, Emirates NBD and Singapore Enterprises as investors.
“I am delighted with the demand we have seen in our shares from institutional investors, which I believe clearly reflects the quality of our business and the opportunities present in the UAE real estate market,” said Abdullah Al Hamli, chairman of the Reit Manager. “We believe the pricing of our IPO should encourage a healthy secondary market while the demand we have seen will serve to underpin the next phase of our growth.”
By the end of last year, Emirates Reit’s portfolio of 10 properties had a combined net leasable area of 1.2 million square feet and were valued at $323.1 million. The entity — established in DIFC on November 28, 2010 — reported a profit and total comprehensive income of $34.8 million, up from $10.9 million from a year before.
Emirates Reit’s total assets were $333.2 million as of December 31 last, up from $212.6 million for. The net asset value per share — a key measure in the Reit industry — had risen to $137.80 from $114.25 on December 31, 2012.
