Dubai
The newly listed ENBD REIT gained more than 5 per cent on the first trading day on Nasdaq Dubai, the first listing on the exchange in a gap of 24 months.
ENBD REIT gained as much as 5.17 per cent to end at $1.17, against the listing price of Dh1.1, data from Nasdaq Dubai showed. About 2,000 units were traded on the name.
Tariq Bin Hendi, director at ENBD REIT told Gulf News that the new listing could act as a refuge for investors given the lack of yields in other asset classes and in other markets.
“People want yield, with interest rates rising and shortage of yields, you look what’s going on in Europe. At the same time, a lot of international investors are looking for proper governance structure, and they want to be associated with very powerful brand in the region with a track record,” Tariq Bin Hendi, director at ENBD REIT told Gulf News.
The total returns in the last 5 years have been 50 per cent, excluding the dividends between 5.5-5.8 per cent. Going forward, Hendi expects dividends of over 7 per cent, which compares favourably with other asset classes.
Interest:
ENBD REIT raised $105 million by offering 94.5 million shares, taking the market capitalisation to around $282.4 million.
“A lot of interest that we got during the book build was from international institutions, now that the REIT is listed we would see a lot more interest coming into the region,” Hendi said.
The REIT has properties worth $314 million and 67 per cent is invested in commercial transactions, while the other 32 per cent is invested in residential.
Going ahead, ENBD REIT may look to raise additional money through secondary market next year.
“We had a potential to raise substainially more than $105 million. We took a more conservative approach wanting to make sure that both existing investors as well as new investors coming into the REIT were comfortable in terms of investment stand point,” Hendi added.
ENBD REIT has historically invested in Dubai are looking at two emirates where they can potentially can do transactions in the next 2-3 months. “The pipeline is healthy. Concurrent to the IPO process, we were working on many potential transactions, but have zeroed in two.”
ENBD REIT would want to deploy the funds accumulated from the exercise over the next two quarters and plans to stabilise the portfolio in a quarter after that.
“So we are potentially looking at 2018 capital raise in secondary market,” Hendi said, adding “we would look to come to the market as often we need to continue build our portfolio and expand the size.”
