UAE’s First REIT Plans IPO On Nasdaq Dubai

The United Arab Emirates’ first real estate investment trust plans to sell shares in an initial public offer on the Nasdaq Dubai bourse before the end of this year, three people aware of the plan said.

Emirates REIT, which was formed in 2010 and complies with Islamic investment principles, has income-generating assets worth 770 million dirhams ($210 million). REITs directly invest in properties and distribute profits as dividends.

Dubai Islamic Bank (DIB) owns 35.3 percent of the company, while state-owned conglomerate Dubai Holding owns 31 percent through two of its units, according to its website. Dubai Holding declined to comment on the IPO plan, while DIB officials were not reachable for comment. A spokeswoman for Emirates REIT declined to comment.

The company is in talks to hire a financial advisor for the listing, one of the sources said, speaking on condition of anonymity as the matter is not public. The sources did not specify the potential size of the IPO.

Emirates REIT’s portfolio mainly comprises commercial properties in Dubai.

IPO activity in Dubai is about to resume after a gap of more than four years caused by the global financial crisis and the emirate’s 2009-2010 property market crash. The most recent listing on either of Dubai’s stock two markets occurred in early 2009, when construction firm Drake & Scull listed.

Bank of London and The Middle East, Britain’s largest stand-alone Islamic bank, said this month it planned to seek a listing on Nasdaq Dubai in October.

Just Falafel, a UAE-based franchise restaurant offering the traditional Arab food, has hired an advisor to help arrange an IPO on Nasdaq Dubai as soon as in October, sources said early in September.

Nasdaq Dubai is by far the smallest and least liquid of the emirate’s two stock markets. It has only seven listed equities, despite regulations and infrastructure that comply with international standards. The other bourse, Dubai Financial Market is home to companies such as Dubai’s top lender Emirates NBD and Emaar Properties.

Earlier this year, Nasdaq Dubai announced plans to set up a new IPO market for small and medium-sized enterprises, including high-growth companies. ($1 = 3.6730 UAE dirhams) (Editing by Dinesh Nair and Andrew Torchia)