Emirates Real Estate Fund secures 190.6 million Sharia compliant finance facility

Emirates Real Estate Fund secures $190.6 million Shari'a compliant finance facility

2 Min | 22 January 2017
Emirates Real Estate Fund ("EREF") has agreed a $190.6 million (AED 700 million) Shari'a compliant finance facility with Emirates NBD, on attractive commercial terms.
  • Emirates Real Estate Fund’s new Shari’a compliant finance facility has been agreed with Emirates NBD on attractive commercial terms
  • Emirates Real Estate Fund has invested over $163 million in property acquisitions in the last 24 months and a portion of the undrawn facility has been earmarked for future acquisitions
  • Move underlines transition to optimal capital structure at 36% loan to value

Dubai, United Arab Emirates, 22 January 2017: Emirates Real Estate Fund (“EREF”) has agreed a $190.6 million (AED 700 million) Shari’a compliant finance facility with Emirates NBD, on attractive commercial terms. The new facility will help contribute to restructuring the balance sheet and creating a more efficient capital structure with the aim of ultimately enhancing returns to investors. EREF’s fund manager, Emirates NBD Asset Management, has earmarked a portion of the partially undrawn facility for future acquisitions. Over the last 24 months the fund has invested over $163 million in real estate acquisitions including Binghatti Terraces in Dubai Silicon Oasis, Arabian Oryx House in Al Barsha Heights, part of Burj Daman Office Tower in the DIFC and a residential building in Remraam, Dubailand.
Commenting on the new facility, Tariq Bin Hendi, CEO of Emirates NBD Asset Management said:

“While Emirates Real Estate Fund and Emirates NBD Bank are two separate entities, the close relationship that exists between them helps to provide the fund with access to important benefits, including financing. This new facility will support our core objective of delivering improved returns for investors, while giving us the capacity to complete strategic acquisitions to boost the value of the fund to investors.”

The partially undrawn facility is a five-year, profit-only Mudarabah facility with a 10% repayment of principal in its fourth year. Post utilisation and full draw down of the facility the loan-to-value ratio of the fund is expected to be below 50%.  
Anthony Taylor, Fund Manager - Real Estate at Emirates NBD Asset Management, commented:

“Having witnessed some stabilisation of Dubai’s institutional real estate market over the recent period, we believe that the market timing for investment acquisitions is favourable. One current focus for EREF is on acquisitions in alternative real estate assets including industrial, education, healthcare and hospitality with long term leases at attractive, market related returns. This is an important building block in our diversification strategy.”

EREF is an opened-ended Shari’a compliant real estate fund focused on investing in income-producing real estate assets. The fund is managed by Emirates NBD Asset Management, a wholly owned subsidiary of Emirates NBD Bank, with occupancy of approximately 76% across the total portfolio of residential and commercials assets as at such date. 

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