ENBD REIT acquires AED280 million The Edge office building
The Oracle-branded building grows ENBD REIT’s total portfolio value to $447 million.
ENBD REIT (CEIC) Limited (Nasdaq Dubai: “ENBDREIT”), the Shari'ah-compliant real estate investment trust managed by Emirates NBD Asset Management, has announced its acquisition of The Edge office building in Dubai internet City from developer SWEID & SWEID at a transaction value of AED 280 million ($76.2 million).
The acquisition utilises ENBD REIT’s existing Islamic debt facility, meaning that the property portfolio is running at an efficient Loan-to-Value (LTV) ratio of 32 per cent. The entire asset will deliver a gross yield of 7.4 per cent and a net yield of 6.6 per cent.
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 per cent 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.”
Maher Sweid, Founder and Managing Partner of the Dubai-based firm, added, “Since launching The Edge in 2014, we have received incredible interest in the development. This announcement clearly demonstrates our ability to deliver contemporary commercial buildings of the utmost quality within the exact parameters of what tenants are looking for. This unique skill has enabled us to deliver excellent returns for our investors.”
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 transaction follows the recent acquisition of a number of alternative assets by ENBD REIT, including the under-construction South View School in Dubai’s Remraam Community at a total value of AED 55 million ($15 million) and the Uninest Dubailand student accommodation building for AED 120 million ($33 million). ENBD REIT’s total property portfolio value now stands at $447 million.
Following the acquisition of The Edge on the 5 October 2017, 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 per cent loan-to-value (LTV) ratio on gross asset value (GAV), with occupancy at 89 per cent. The portfolio's weighted average unexpired lease term (WAULT) is 3.5 years, with offices accounting for 67 per cent of the portfolio, residential accounting for 22 per cent and alternative assets (including education) making up the remaining 11 per cent. ENBD REIT's last reported NAV was $292 million, or $1.15 per share, as at 30 June 2017.