ENBD REIT PLC, a leading Shari’a compliant real estate investment trust managed by Emirates NBD Asset Management Limited, announced it has secured a $177 million (AED 650 million) sharia-compliant financing facility with Mashreq Bank.
The investment trust will use the facility to refinance $134.5 million (AED 494 million) of its existing debt, according to a press release on Monday.
An additional funding of the facility will be also allocated for acquisitions and corporate purposes, ENBD REIT added.
“The 12-year facility is profit only for the first 4 years, amortising 80% during the following 8 years with a 20% balloon payment at the end of its term. At 3-month EIBOR + 2.65% profit margin, the new facility will reduce ENBD REIT’s overall cost of debt,” it highlighted.
Anthony Taylor, head of Real Estate at Emirates NBD Asset Management, said: “The facility that we have secured with Mashreq Bank is important for both refinancing our existing debt – to deliver important cost savings for the REIT – as well as to support our acquisitions programme.”
“Our intention is to diversify our holdings by increasing allocation to the alternative segment, where we are seeing most growth and resilience in light of current market conditions,” he added.
Net asset value (NAV) of the trust reached $270 million or $1.08 per share at the end of March and its total property portfolio value hit $450 million.
ENBD REIT’s total loans amounted to $180 million as at 31 March 2019, with a loan-to-value (LTV) ratio of 40, the press release said.
The trust’s portfolio occupancy of 86% was bolstered by a leasing strategy that achieved 84% occupancy in the office portfolio, 81% occupancy in the residential portfolio, and 100% occupancy in the alternative portfolio.
“The alternative portion of the portfolio includes student accommodation, education, and retail assets, with ENBD REIT’s acquisition strategy seeking to expand into new asset classes including industrial, healthcare and education,” ENBD REIT said.
ENBD REIT, listed on Nasdaq Dubai, has invested $150 million in properties across alternative and office asset classes over the past 24 months.