ENBD REIT has secured a total of $75 million (AED 275 million) murabaha finance facility with Standard Chartered Bank for a three-year period with a possibility to increase the facility to $100 million, according to a recent statement on Thursday.
This new facility aims at endorsing REIT’s focus on portfolio diversification through further acquisitions to maximise income returns and mitigate risk.
The facility will be in two tranches, ENBD REIT, the UAE sharia-compliant real estate investment trust managed by Emirates NBD Asset Management Limited, noted.
Tranche A of $45 million at total drawdown will partially repay ENBD REIT’s existing debt, following oversight approval.
The utilisation of Tranche A will not impact the Loan-to-Value (LTV) ratio of 38% and results in a reduction in profit costs better aligning with ENBD REIT’s investment strategy and target returns.
Meanwhile, Tranche B of $30 million will boost potential acquisitions and will raise the LTV to 42%.
The Nasdaq Dubai-listed ENBD REIT noted that the facility has a bullet payment at maturity.
“The facility that we have secured with Standard Chartered Bank will support our core objective of delivering value and income to investors, by enabling us to complete strategic acquisitions that boost the diversity and size of our portfolio, as well as reducing our cost of financing. At present, we are primarily focused on alternative assets and are especially keen to pursue opportunities in the industrial, logistics and healthcare sectors,” head of Real Estate at Emirates NBD Asset Management, Anthony Taylor, said.