IPO: Dubai Residential REIT gives price range

Dubai: For Dubai's latest IPO, the price range has been set between Dh1.07 to Dh1.10 per offer unit by Dubai Residential REIT.

This sets up a market cap of between Dh13.9 billion ($3.8 billion) and Dh 14.3 billion ($3.9 billion).

The Dubai Residential REIT offering gives investors an opportunity to tap into future growth from its huge portfolio of homes across 21 of the city's in-demand communities.

Each retail investor to the IPO is guaranteed a minimum 2,000 units. But provided the total number of units 'issued under the minimum guaranteed allocation does not exceed the tranche size and remains within the limits and conditions set out in the prospectus'.

In the first tranche, retail subscribers are allocated 10% of the offer units, together making up 162.5 million units.

The second tranche - open to institutional buyers - is for the other 90% of the offer units - 1.46 billion units.

REITS - or real estate investment trusts - allows investors to take stakes in the portfolio of assets. They are then assured of returns based on the income these property assets generate over a year.

The Dubai Residential REIT portfolio comprises communities that have been seeing double- or near double-digit growth in rental income consistently in recent years.

According to market analysts, the price range is in line with their expectations and typical of how REITs price in their units.

Dividends

Shareholders will get their rewards twice a year, with the first dividend to be paid next September.

It will be the higher of:

For 2026 and thereafter, Dubai Residential REIT intends to distribute 'at least 80% of profit for the period before changes in fair value of investment property for each accounting period, subject to Board approval'.

Timeline of Dubai Residential REIT IPO