Emirates REIT plans to issue $300 million sukuk this year

Dubai / Reuters

Dubai-based Emirates REIT, a sharia-compliant real estate investment trust, plans to issue a debut Islamic bond of at least $300 million by the end of this year, said a source close to the company.
The sukuk, to be denominated in US dollars, could potentially replace all of the company’s outstanding debt, said the source, who spoke on condition of anonymity because of
commercial sensitivities.
Dollar-denominated bond issuance out of the six-nation Gulf Cooperation Council has totalled $79.2 billion so far this year, higher than the record $63.5 billion during the whole of 2016, Thomson Reuters data shows. Emirates REIT, managed by Equitativa, has called a shareholder meeting on November 23 to discuss the planned sukuk, which could be issued shortly after that date, said the source.
The company’s total debt as of June 30 was about $300 million. The loan-to-value ratio of the REIT stood at 36.8 percent, below its regulatory maximum LTV of 50
percent, which means
here is room for issuance larger than $300 million, the
source added.
The company, which receives rental revenues from its real estate assets, had a portfolio of $772 million at the end of June. Its portfolio includes mixed-use properties, office buildings and schools in Dubai.