EREF, ENBD secure $190m Shari’a compliant facility
The five-year, profit-only Mudarabah facility with have a 10% repayment of principal in its fourth year
Emirates Real Estate Fund (EREF) has signed a $190.6m deal for a Shari’a compliant finance facility with Emirates NBD, it announced on Sunday.
The partially undrawn facility, which has been earmarked by the two entities for future acquisitions, will help contribute to restructuring the balance sheet and creating a more efficient capital structure with the aim of ultimately enhancing returns to investors.
The five-year, profit-only Mudarabah facility with have 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, said: “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.”
Over the last 24 months the fund has invested over $163m 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.
Tariq Bin Hendi, CEO of Emirates NBD Asset Management said: “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.”
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.