Emirates REIT plans to refinance $400m sukuk due to mature next month.
Emirates REIT is a sharia-compliant real estate investment trust based in Dubai and faced opposition to the refinancing last year.
Now, however, Emirates REIT has received support from an ad hoc group of eligible certificate holders comprised of institutional investors. The group has stated that certificate holders have confirmed their support to date hold more than 30% of the currently outstanding principal amount of the certificates.
Emirates REIT refinancing
It is offering sukuk holders, for each $1,000 in face amount of their sukuk, $950 in face amount of new notes and $50 in cash.
The notes will pay a profit rate of 9.5% a year from the current 5.125% and collateral will be given “with assets providing coverage of at least 150% of the outstanding amount of the New Secured Certificates”, Emirates REIT said in a statement.
Thierry Leleu, CEO of the manager of Emirates REIT, Equitativa, said: “In the current extraordinary geopolitical and macro-economic circumstances, we have worked constructively with all our Certificate holders and lenders towards a new, comprehensive refinancing package that we believe is attractive for all parties.
“The economically compelling terms of this proposal will benefit all Certificate holders and enable the REIT to successfully achieve its refinancing.
“We have therefore today launched a new consent solicitation and we are confident that, with the support our Certificate holders including the Ad Hoc Group, it will comfortably meet the required consent threshold. We appreciate the positive support and input over the past few months from all our stakeholders.”
In the past two years, the REIT has enhanced its financial and operational performance by increasing occupancy by more than 16 percentage points to 82% as at June 30, 2022 (from 66% as at 30 September 2020) and increasing like-for-like annualised gross rental income by 28%.
The REIT is also displaying promising future upside on the value of its portfolio given the improving Dubai real estate market sentiment (up 16% since January 2021, excluding the sale of the Jebel Ali School).
Follow us on
