Dubai Investments is awaiting regulatory approval for a “real estate investment trust” (Reit) that would have an initial asset size of Dh3 billion. The company will provide up to 40 per cent and the rest of it through investor-partners.
“Our asset base will cover everything from health care to industrial assets and include those in other emirates too,” said Khalid Kalban, CEO and Managing Director. “We will include properties from within the DI portfolio, but we have already identified the partners and initial assets that will form part of the Reit.
“We will then list it and eventually grow the fund’s size to Dh10 billion.” (Property related operations account for 57 per cent of DI’s current revenue stream and 68 per cent of its asset base.) “The intention is to offer returns of “not less than 7 per cent (annualised)”, Kalban said.
Reits are becoming an increasingly vital component of the local real estate landscape. These are funds that tap multiple investors and which are then used to pick up stakes in yield-generating assets. The Dubai market already has a handful of them, a couple of which have turned in significant performances in the recent past.
“Launching the Reit will also allow us to deleverage and the plan is to go to market for about Dh700 million,” said Kalban. Apart from Dubai Investments Park, DI has been building an exposure in education and health care assets, through an association with Al Mal Capital.
Meanwhile, DI is still intent on having an IPO for Emicool, the district cooling subsidiary. The plan is to float about 30 per cent.
On whether it was the right time to still think about a public float — especially as stock markets have turned choppy — Kalban said: “Right now, Emicool is lining up for an acquisition and then we will have a private equity placement. Keep in mind we only plan to put up about 30 per cent in the IPO. Based on these factors, we shouldn’t have an issue with investor response.”
Dubai Investments recorded a profit of just over Dh1 billion for 2017. Its proposal for a 12 per cent dividend has been approved. Total assets were up by Dh890 million to Dh17 billion.
The company is open to any possibility where it could be called in to create an industrial park like the one it did at DIP, the CEO added.
Then there are the overseas interests — “We are waiting the final government clearance in Kenya and Angola before launching our operations there,” Kalban said.
“As for the Riyadh plans, it is still very much there. We are taking our time to go through all the processes, and also keeping in mind the general economic situation. But all of the initial preparatory work is on track — we are very much focused on a presence in Saudi Arabia.”