A generic image of Abu Dhabi's skyline. Mega deals such as the one by ESIC will generate significant momentum for the real estate sector. Image Credit: Supplied

Dubai: The blockbuster property deals are still taking place in UAE property market. The asset manager, Emirates Strategic Investments Company (ESIC), has acquired two income-generating, mixed-use properties, funded partially through a $600 million (Dh2.2 billion) Sukuk issue done last year. The two purchases cost Dh1 billion, and features 1,352 residential and commercial units spanning a built-up area (BUA) of 238,800 square metres. They generate an expected net yield of more than 8 per cent.

“ESIC will continue to diligently monitor multiple industries for potential assets that will strengthen our foothold and that of our investors, both locally and internationally,” said a statement from ESIC.

The purchases are in “prime locations” and represent opportunities for “resilient income streams”. “Real estate is a key component of ESIC’s diversification strategy,” the statement added. “By identifying quality assets and acquiring them at the optimal moment, we bring great value for our Sukuk investors.

“This latest purchase reflects our deep commitment to the continued bolstering of our real estate portfolio with high-quality, high-yield assets.”

The asset management company will also branch into sectors such as aviation and government-backed clean energy initiatives. The company intends to make further acquisition announcements at its upcoming investor conference.

Funding the mega deal
* The deal was funded by ESIC’s Dh2.2 billion debut sukuk issued in July last year. The five-year Sharia-compliant instrument was part of ESIC’s $1 billion Sukuk programme, which is listed on London Stock Exchange.
* It was priced on launch with a 3.939 per cent profit rate. The sukuk was in "demand with more than 135 investors from more than 20 countries showing interest, leading to the offering being 6.2 times oversubscribed at an overbook of Dh13.6 billion," the company said in a statement.