Dubai Holding to launch IPO for its real estate investment fund

Dubai: Dubai Holding is going for an IPO to launch its Real Estate Investment Trust (REIT) fund.

The REIT will be a Sharia-compliant and represents a major development from one of Dubai’s biggest names in the real estate development and investment space, with the likes of Nakheel, Meydan and Meraas in its fold.

The IPO will be in the form of wholly-owned subsidiary Dubai Residential REIT.

The subscription period is likely to be from May 13 to May 20.

At the time of its DFM debut, the float is expected to be the GCC’s largest listed REIT, with a gross asset value of Dh21.63 billion – this is ‘almost double the combined GAV of the five largest REITs in the region’.
“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,” said a statement.

Real estate investment trusts – or REITs – offer investors to put their resources into funds that own and operate multiple property-related assets. The DFM already has a REIT presence from the likes of Al Mal Capital.

Dividend policy for new REIT
The Dubai Residential REIT plans a semi-annual dividend distribution policy – in April and September – starting from September 2025.

It expects the sum of its first two dividend payments to be the higher of:

• Dh1.10 billion; and
• 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 December 31, 2025.

Dubai Residential
“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.,” said Amit Kaushal, Group CEO at 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 IPO presents investors with a unique investment opportunity to participate in this success story while benefiting from the wider capabilities and opportunities within the broader Dubai Holding ecosystem.”

What the new IPO will provide
The Dubai Holding entity will float 1.62 billion units, which will be 12.5% of Dubai Residential REIT’s issued unit capital.

There are two tranches – the UAE Retail Offer making up the first and targeting retail investors and those entities holding a National Investor Number (NIN) with DFM.

The second tranche is for institutional investors.
The first tranche has been allocated 10% of the offer units, making up 162.5 million units.

Each successful subscriber in the first tranche will be guaranteed a minimum 2,000 units, ‘provided that the total number of units issued under the minimum guaranteed allocation does not exceed the tranche size’.

The second tranche gets 90% of the offer units, of 1.46 billion units.

DHAM Investments will retain 87.5% of Dubai Residential REIT’s post-IPO.