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Dubai's ENBD REIT acquires $15m South View School

Following completion, South View School is expected to generate an initial rental yield of 9% on project costs, with a fixed escalation of 4% every two years

ENBD REIT has acquired Dubai's South View School.
ENBD REIT has acquired Dubai's South View School.

A school, with $15m (AED55m) in construction cost, will be developed in Dubai's Remraam community by ENBD REIT. 

The real estate investment trust recently inked a Mustaha agreement for the 183,504ft2 plot of South View School, which will be Interstar Education's fifth campus in Dubai. 

READ: ENBD REIT records $292m net asset value

With a ground floor area of 132,000ft2, the school is expected to generate an initial rental yield of 9% on project costs, with a fixed escalation of 4% every two years. 

The facility's renewable lease term spans nine years, and the school will pay additional rent during the construction period, worth 5% on draw-down. 

Interstar Education, a part of Interstar Advisory Services, will operate South View School. 

Remarking on the acquisition, Tim Rose, head of real estate at Emirates NBD Asset Management, said the agreement marks ENBD REIT's first acquisition of an educational asset. 

READ: Emirates REIT finishes $83m Akoya school works

He continued: "This is [...] an important step in the ongoing diversification of our portfolio away from purely office and residential properties.

"It is a pleasure to be working with Interstar Education, a renowned and established schools operator in Dubai, and we look forward to a long and fruitful relationship.

"The UAE’s education sector continues to prosper and grow, and we are very proud to have become a part of that journey." 

Following acquisition and completion of the development, the ENBD REIT property portfolio’s total value will be $367m (AED1.4bn), the company said in a statement. 

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Construction Week - Issue 749
Sep 15, 2019