The UAE-listed Sharia-compliant Real Estate Investment Trust (Emirates REIT) issued Wednesday Islamic bonds worth $380 million to refinance a $400 million Sukuk issued back in 2017.
More than 88% of the existing certificate holders have participated in the consent solicitation, according to a statement Wednesday, with more than 99% voting in favor of the refinancing.
The New Secured Certificates have several features including a fully secured position and a profit rate increase from 5.125% to 9.5%. The rate increase was attributed to the current credit environment with rising inflation, profit rates, and market volatility.
The new maturity date is December 2024, with an option to extend for one year, Emirates REIT said.
"The post-pandemic environment in Dubai represents an attractive opportunity for the REIT to cement its leading position in the market while at the same time taking advantage of the buoyant commercial real estate market and new opportunities in areas such as logistics and education,” said Thierry Leleu, CEO of Equitativa, which is the manager of Emirates REIT.
The deal allows Emirates REIT to progress with development and growth plans.
The Dubai-based real estate investment trust has been increasing occupancy and rental rates over the past two years, while retaining a strong focus and discipline on cost and expense management. This included a self-imposed management fee reduction during the COVID-19 pandemic period, it said.
In the first nine months of 2022, Emirates REIT's net profit increased by 39.9% to reach $69 million. The value of the REIT’s portfolio at the end of that period was $766.3 million, which represents a 12.4% year-on-year increase.
