Dubai Residential REIT IPO opens to investors: What to know when buying units before May 28 listing

Dubai: Investors now have their chance to buy into the first IPO of the year on the Dubai Financial Market (DFM), with Dubai Residential REIT opening subscriptions ahead of its stock market debut on May 28. This marks the first REIT listing under the UAE’s newly updated regulations.

The REIT is being listed by Dubai Holding through its subsidiary, Dham Investments, and focuses exclusively on income-generating residential leasing. After offering 1.63 billion units—representing 12.5% of issued unit capital—Dham will retain the remaining 87.5% stake. The IPO price range is set between Dh1.07 and Dh1.10 per unit, implying a market valuation of Dh13.9 billion to Dh14.3 billion and total IPO proceeds between Dh1.74 billion and Dh1.79 billion.

Backed by a residential property portfolio of over 35,000 homes across 21 in-demand Dubai communities, and a gross asset value of Dh21.6 billion, Dubai Residential REIT represents a major milestone in the UAE investment landscape. It is not only one of the largest REITs in the region by assets but also the first under the revised REIT framework.

The REIT is Sharia-compliant and aims to provide steady income to unitholders through rental revenues. REITs must distribute at least 80% of their annual net profits as dividends, making them attractive for income-focused investors. Dubai Residential REIT expects to pay out Dh1.10 billion in dividends for 2025. By 2026, distributions will equal 80% of profit before fair value changes.

Depending on the final IPO price, the gross dividend yield is projected at 7.9% (Dh1.07) or 7.7% (Dh1.10) for 2025. The structure has become more tax-efficient too, as REITs are now exempt from corporate tax and individual UAE investors pay no tax on dividends or capital gains.

The REIT boasts strong cash flow, robust margins, and a prudent capital structure. Recent completions of large-scale investment programmes have bolstered free cash generation, and conservative leverage provides flexibility across market cycles, according to Dubai Holding.

Ninety per cent of the offered units are earmarked for professional investors, while 10% are allocated to retail investors. Individuals must subscribe between May 13 and May 20. Investors can subscribe via Emirates NBD, ADCB, ADIB, Al Maryah Community Bank, CBD, Emirates Islamic, FAB, and Mashreq.

To subscribe, you need a valid National Investor Number (NIN), available via the Dubai Financial Market website or app. After receiving a NIN, appoint a licensed broker to manage trades.

Each investor must fill out a single application and submit it through a bank or broker. If paying via the UAE Central Bank Fund Transfer System (FTS), you must include your NIN and subscription amount.

Minimum investment for individuals is 2,000 units. Final unit allocation and refunds, if any, will be processed by May 26. The final offer price will be announced on May 21, with SMS notifications sent to subscribers.

May 13: Subscription opens
May 20: Subscription closes
May 21: Final IPO price announced
May 26: Allotment and refunds
May 28: Trading begins on DFM

During the subscription period, investors commit to buying units at a to-be-finalised price. If oversubscribed, investors may receive fewer units than requested. The final listing price may differ from the subscription range.

· Apply early to increase the chance of allotment

· Ensure all documents are in order and submitted correctly

· Use banks or brokers offering access to DFM IPOs

· Consider your risk appetite and review the prospectus carefully

Bottom line? IPOs can be volatile, especially on debut, but for investors seeking long-term exposure to UAE real estate with consistent income potential, Dubai Residential REIT could be a compelling entry point.