ENBD REIT acquires Dubai Internet City building for AED280 million

Dubai / Emirates Business

ENBD REIT (CEIC) Limited, the Shari’a-compliant real estate investment trust managed by Emirates NBD Asset Management, announced its acquisition of The Edge office building in Dubai Internet City from developer SWEID & SWEID at a transaction value of AED 280 million.
The premier 92,000-square foot office building, is home to global tech outfit Oracle, social media giant Snapchat, and American education publisher McGraw Hill. As a prime grade ‘A’ property, The Edge’s tenants enjoy a central and easily accessible address, high-end interior design, sustainable credentials, impeccable building infrastructure and quality facility management.
The seven storey development also boasts 233 parking bays distributed over the ground floor and three levels of basement parking, offering tenants one of the highest parking-to-office ratios in the area.
The acquisition utilizes ENBD REIT’s existing Islamic debt facility, meaning the property portfolio is running at an efficient Loan-to-Value (LTV) ratio of 32%. The entire asset will deliver a gross yield of 7.4% and a net yield of 6.6%.
Commenting on the acquisition, Tim Rose, Head of Real Estate at Emirates NBD Asset Management, said: “We’re pleased to announce our third acquisition since listing on Nasdaq Dubai in March, and it is fitting that The Edge is a fully-leased, prime grade ‘A’ asset. With a levered return of 9% on equity, this is a strategic acquisition of a flagship building that will provide income and growth in the coming years, thereby providing us with flexibility to engage in a wider range of future investment opportunities, while at the same time delivering strong and consistent returns to shareholders.”
Following the acquisition of The Edge on October 5, ENBD REIT now has a total of 10 assets across Dubai, with a property portfolio value of $447 million. The portfolio now has a 32% loan-to-value (LTV) ratio on gross asset value (GAV), with occupancy at 89%.

The portfolio’s weighted average unexpired lease term (WAULT) is 3.5 years, with offices accounting for 67% of the portfolio, residential accounting for 22% and alternative assets (including education) making up the remaining 11%. ENBD REIT’s last reported NAV was $292 million, or $1.15 per share, as at June 30.