Dubai’s ENBD REIT acquires Oracle building for $76m

Dubai-listed real estate investment trust ENBD REIT has announced the acquisition of an office building housing the regional headquarters of technology firm Oracle in Dubai for Dhs280m ($76.2m)

The October 5 purchase of the 92,000-square-foot Edge office building in Dubai Internet City from developer SWEID & SWEID brings the Shariah-complaint REIT’s total property portfolio to $447m.

Trust manager, local bank Emirates NBD’s asset management unit, said the building was prime grade A property and also housed offices for social media company Snapchat and American education publisher McGraw Hill.

It includes 233 parking spaces across the ground floor and three basement levels.

The acquisition was made with the REIT’s existing Islamic debt facility and it is expected to deliver a gross yield of 7.4 per cent and net yield of 6.6 per cent.

ENBD REIT is running a loan-to-value ratio of 32 per cent following the deal.

“With a levered return of 9 per cent on equity, this is a strategic acquisition of a flagship building that will provide income and growth in the coming years, thereby providing us with flexibility to engage in a wider range of future investment opportunities, while at the same time delivering strong and consistent returns to shareholders,” said Tim Rose, head of real estate at Emirates NBD Asset Management.

After becoming only the second REIT to list on the Nasdaq Dubai in March ENBD has accumulated 10 assets across Dubai.

Its recent acquisitions include the under-construction South View School in Dubai’s Remraam Community for $15m and the Uninest Dubailand student accommodation building for $33m.

Dubai Land Department said last month it would introduce new regulations governing real estate investment trusts including fees for investors.

Read: Dubai Land Department to soon issue new rules for REITs