ENBD REIT, the Shari’a-compliant real estate investment trust managed by Emirates NBD Asset Management Limited, sold Remraam residential assets for an undisclosed amount, but at a slight premium to market value on 31 March this year.
In a filing with Dubai Financial Market (DFM), ENBD REIT said the decision to divest the asset aligns with its turnaround strategy to optimize its portfolio with a focus on dividend growth via proactive asset management.
The debt will be paid down with the sales profits, bringing the loan-to-value (LTV) ratio down from 51% to 49.4%.
ENBD REIT continues to explore opportunities for strategic investments, portfolio rebalancing
Dubailand is home to the two residential buildings, Al Ramth 57 and 59. They were purchased in September 2015, accounting for 4% of the REIT’s portfolio value. The net leasable area of the two towers combined is 112,154 sq—ft, housing 105 units.
Samir Kazi, Head of Real Estate at Emirates NBD Asset Management and CEO of ENBD REIT, commented: “Following a comprehensive review of the portfolio, we have identified a clear turnaround strategy to unlock value for our shareholders and maintain our position as a reliable dividend payer.
“This marks a significant first step to streamline our future-facing portfolio by improving the overall mix of the portfolio and strengthening our financial foundations by reducing our debt.”
ENBD REIT is actively seeking to rebalance its portfolio and make strategic investments as part of its sustainable turnaround journey. Despite challenges posed by a high interest rate environment and pricing expectations, the company maintains its commitment to delivering value to its investors through proactive asset management and prudent financial practices.
Conclusion
This strategic divestment by ENBD REIT demonstrates the company’s commitment to adapting to market conditions and optimizing its portfolio for long-term growth. By reducing its LTV ratio and focusing on dividend growth, ENBD REIT is positioning itself to withstand economic fluctuations better and deliver consistent returns to shareholders. The sale of Remraam Towers at a premium to market value also highlights the potential for value creation within the Dubai real estate market. As ENBD REIT continues to explore opportunities for portfolio rebalancing and strategic investments, investors will be watching closely to see how these moves translate into improved performance and increased shareholder value in the coming years.
