Dubai Holding launches IPO for Dubai Residential REIT

06/05/2025 01:53 AST

Dubai Holding, through its wholly owned subsidiary DHAM REIT Management (the Fund Manager), today announced its intention to launch an initial public offering (IPO) for Dubai Residential REIT.

Dubai Residential REIT is a Shariah-compliant income-generating closed-ended real estate investment fund under establishment and one of the largest owners and operators of residential real estate in Dubai (the REIT), to list its units for trading on the Dubai Financial Market (DFM), a statement said.

Dubai Residential REIT is the GCC's first pure-play listed residential leasing-focused REIT and, at the time of listing, is also expected to be the GCC's largest listed REIT, with a gross asset value (GAV) of AED21.63 billion ($5.89 billion), almost double the combined GAV of the five largest REITs in the region, it said.

The REIT manages 35,700 residential units strategically positioned in key catchment areas across Dubai, making it one of the largest residential real estate owners and operators in Dubai and the benchmark for residential real estate in the emirate.

Dubai Residential REIT's portfolio shall be managed by the Fund Manager pursuant to a fund management agreement between Dubai Residential REIT and the Fund Manager, leveraging its expertise to ensure optimised asset performance and stable returns, said the statement.

The Fund Manager's role includes, but is not limited to, managing and operating the REIT's residential assets leasing business, monitoring the financial status, key performance indicators and progress of Dubai Residential REIT's business and portfolio investments (including procuring semi-annual valuation reports), preparing the REIT's financial reports for publication and appointing and managing service providers for functions including, but not limited to, facility management and property management.

The REIT benefits from the broader residential ecosystem curated by Dubai Holding, a global investment leader with one of the largest land banks in the Emirate of Dubai.

SUMMARY OF THE OFFERING
* DHAM Investments (the selling unitholder), a subsidiary of Dubai Holding, is currently the sole unitholder of Dubai Residential REIT and is offering 1,625,000,000 units in the Offering.
* The offering subscription period is expected to run from May 13 to May 20 (both days included).
* Admission of units to trading on the DFM is anticipated on or around May 28.
* The Fund Manager reserves the right to amend the size of the offering at any time prior to the end of the subscription period in its sole discretion, subject to the applicable laws of the UAE and the approval of the SCA.
* The Shariah Supervision Committee of Dubai Residential REIT has issued a fatwa confirming that, in its view, both the REIT and the Offering are compliant with Shariah principles. The Internal Shariah Supervision Committee of Emirates NBD Bank has issued a fatwa confirming that, in its view, the Offering is compliant with Shariah principles.

DETAILS OF THE OFFERING
The Offering will include 1,625,000,000 Units, representing 12.5% of Dubai Residential REIT's issued unit capital. The Offering consists of two tranches: the UAE Retail Offer (First Tranche), which targets retail investors and eligible entities holding a National Investor Number (NIN) with the DFM; and the Institutional Offering (Second Tranche), which is directed at qualified institutional investors outside the United States under Regulation S, subject to applicable UAE laws and SCA approval.

The First Tranche is allocated 10% of the Offer Units, representing 162,500,000 units. Each successful subscriber in the First Tranche will be guaranteed a minimum allocation of 2,000 units, provided that the total number of units issued under the minimum guaranteed allocation does not exceed the tanche size and remains within the limits and conditions set out in the Prospectus.

The Second Tranche is allocated 90% of the offer units, amounting to 1,462,500,000 units, which is restricted to "Professional Investors" (as defined in the SCA Board of Directors' Chairman Decision No.13/R.M of 2021 (as amended from time to time)).

The sole unitholder, DHAM Investments, will retain 87.5% of Dubai Residential REIT's issued unit capital following the offering, assuming all units being offered are sold and no changes are made to the offering size.

The price of the units being offered will be determined through a book-building process conducted in consultation with the Joint Global Coordinators, the Fund Manager and the selling unitholder.

SUMMARY OF DIVIDEND POLICY
* Subject to the REIT Board's approval and other provisions of the UAE prospectus published today (May 5), Dubai Residential REIT intends to adopt a semi-annual dividend distribution policy, making payments in April and September of each year, starting from September 2025.

* The REIT expects that the sum of its first two dividend payments, expected to be made in September 2025 and April 2026, will be the higher of: (i) AED1,100 million; and (ii) an amount equal to 80% of profit for the period before changes in fair value of investment property, in respect of its financial results for the year ending 31 December 2025, subject at all times to Board approval.

* In respect of the financial results for the year ending 31 December 2026 and thereafter, Dubai Residential REIT intends to distribute at least 80% of profit for the period before changes in fair value of investment property for each accounting period, subject to Board approval.

DUBAI RESIDENTIAL REIT'S INVESTMENT PROPOSITION
Dubai Residential REIT includes a diversified portfolio spread across multiple locations, property types and price segments (comprising premium, community, affordable and corporate Housing) through a range of multi-family and single-family offerings that cater to the broad and growing residential needs of Dubai residents across varying income levels.

The REIT generates stable and resilient operating margins and cash flows underpinned by its well-balanced tenant mix, comprising 43% corporate tenants and 57% individual tenants by units for the year ended 31 December 2024.

As part of the Dubai Holding ecosystem, the REIT benefits from Dubai Holding Group's broad capabilities within the real estate sector, including development, asset management, facilities management and community management, making it well-positioned to achieve sustainable growth and deliver attractive returns to investors.

Commenting on the launch of the Dubai Residential REIT IPO process, Amit Kaushal, Group Chief Executive Officer of Dubai Holding, said: "As one of the cornerstones of Dubai Holding, Dubai Holding Asset Management's residential leasing portfolio, Dubai Residential, has consistently delivered high-quality communities that meet the evolving needs of Dubai's diverse population.

"The integration of Nakheel and Meydan's residential portfolios under Dubai Holding last year was a significant milestone in Dubai Residential's journey that enhanced its status as one of the region's largest residential leasing platforms. This IPO presents investors with a unique opportunity to participate in this success story while benefiting from the wider capabilities and opportunities within the broader Dubai Holding ecosystem.

"As we prepare for the listing, we look forward to working alongside our Dubai Residential REIT stakeholders to further enhance our offerings and continue driving the growth of Dubai as a leading global hub for living and investment," he said.

Malek Al Malek, Group Chief Executive Officer of Dubai Holding Asset Management and Chairman of the Investment Committee of DHAM REIT Management, commented: "Our residential leasing journey spans from some of the earliest purpose-built developments over 20 years ago to an exceptional portfolio of properties today that reflect Dubai's ongoing growth and development. This rich legacy, combined with a relentless commitment to quality, has solidified our role as a creator of diversified, connected communities, enabling us to capture the significant opportunities emerging from Dubai's property market.

"The decision to launch the IPO of Dubai Residential REIT marks a natural evolution in our story, offering investors a unique opportunity to participate in the GCC's largest and first pure-play listed residential leasing-focused REIT. With a diversified portfolio valued at over AED21 billion, this milestone enables us to expand our impact, deliver sustainable unitholder returns, and continue shaping the future of urban living in Dubai."

Ahmed Al Suwaidi, Managing Director of DHAM REIT Management, said: "The Dubai Residential REIT provides investors with a straightforward and economical path to invest in premier, income-generating residential real estate assets across the city, without the complexities of direct property ownership and management. This opportunity is designed to yield regular dividends and offers the potential for capital growth, portfolio diversification, inflation hedging and the assurance of a Shariah-compliant investment framework.

"Our diverse communities, carefully managed and strategically located across Dubai, enjoy high demand and solid retention, reinforced by the superior amenities and tailored living experiences that we curate. This strategic positioning across major residential hubs minimises exposure to any single location or tenant type, thereby enhancing resilience and maintaining stable occupancy rates. As we look to the future, we remain focused on enhancing all elements of our portfolio as well as launching new developments in the medium and long term."

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