Eskan Bank, a leading provider of housing finance in Bahrain, said the initial public offering of Bahrain's first Sharia-compliant retail real estate investment trust (REIT) has exceeded 95 per cent subscription rate.

Securities & Investment Company (Sico) was the mandated lead manager for the IPO, which opened on November 22 and closed on December 6. It was also the BD19.8 million ($52 million) REIT’s sub-investment manager and market maker.

Announcing the results, Eskan Bank and Sico said the IPO offered 144.3 million units of the total 198 million units in issuance at an offer price of BD 0.100 units, totalling BD14.4 million ($38.2 million). The IPO opened on  November 22 and closed on December 6.  

“We note the support the REIT has received from concerned from officials, especially Minister of Housing and the chairman of Eskan Bank Bassim Bin Yaqoob Al Hamer. His directions and support throughout the REIT’s formation period, the first of its kind in Bahrain, was invaluable," remarked Dr. Khalid Abdulla, the general manager of Eskan Bank.

"This REIT provides a unique investment opportunity in the Bahraini real estate sector, which shall be managed by a professional team that aims to maximize returns," he added.

Moreover, Dr Abdulla said: "Subscriptions in the REIT units exceeded our expectations considering the challenging regional economic conditions, we are particularly delighted with the amount of subscription received from the retail investors as they were the prime target of this IPO."

"We extend our gratitude to investors who have demonstrated their faith in the product. We now look forward to the listing of the REIT’s units on the Bahrain Bourse on 2 January 2017 after which all unit holders can start trading through their appointed broker," he noted.

The Trust announced that units will be allotted in consultation with the lead manager, according to the allotment basis detailed in the offering prospectus, with eligible applicants being allotted their full subscription amount.

Allotment notices will be mailed to applicants by December 22 to the address specified on the application form.

Lauding Eskan on the closing of the landmark IPO, Najla M. Al Shirawi, the chief executive of Sico, said it is all the more significant given the current highly-challenging market conditions.

"It is particularly pleasing that the unique structuring of the offering, with benefits comprising attractive returns, diversity, liquidity and lower risk, proved to be so popular with retail investors fulfilling the objective of Eskan bank to benefit individual investors," she added.-TradeArabia News Service