ENBD REIT acquires Dubai’s The Edge from Sweid & Sweid for $76.2m
ENBD REIT’s acquisition of The Edge office building in Dubai takes the organisation’s total portfolio value to $447m
ENBD REIT has purchased The Edge in Dubai from Sweid & Sweid for $76.2m (AED280m).
The acquisition of the Oracle-branded property takes the UAE-headquartered real estate investment trust’s (REIT) total portfolio value to $447m (AED1.6bn).
Located in Dubai Internet City, and developed by Sweid & Sweid, The Edge is a seven-storey, 8,550m2 property that boasts 233 parking bays.
Global technology firm, Oracle, accounts for 85% of the building’s existing occupancy. The premises is also home to social media giant, Snapchat, and US-based education publisher, McGraw Hill.
Commenting on the acquisition, Tim Rose, head of real estate at ENBD REIT’s manager, 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% 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.”
The acquisition utilises ENBD REIT’s existing Islamic debt facility, meaning that its property portfolio is running at a loan-to-value (LTV) ratio of 32%. The entire asset is expected to deliver a gross yield of 7.4%, and a net yield of 6.6%.
Maher Sweid, founder and managing partner of Dubai-based Sweid & Sweid, 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 transaction follows a string of recent acquisitions by ENBD REIT, including the under-construction South View School in Dubai’s Remraam community at a total value of $15m (AED55m); and the Uninest Dubailand student accommodation building for $33m (AED120m).
Following its acquisition of The Edge, ENBD REIT now boasts a total of 10 assets across Dubai. Its $447m (AED1.6bn) portfolio now has a 32% LTV ratio on gross asset value (GAV), with occupancy at 89%.
Its portfolio’s weighted average unexpired lease term (WAULT) is three and a half years, with offices accounting for a 67% portion, residential units accounting for 22%, and alternative assets – including education – accounting for the remaining 11%.
ENDB REIT’s last reported net asset value (NAV) was $292m (AED1.1bn), or $1.15 (AED4.22) per share, as of 30 June 2017.