Eskan Bank, a leading provider of housing finance in Bahrain, said there has been an overwhelming response for Bahrain’s first Sharia-compliant retail real estate investment trust (REIT)’s initial public offering (IPO) which is set to close on Tuesday (December 6).

Securities & Investment Company (Sico) is the mandated lead manager, sub-investment manager and dedicated market maker for the IPO, while Bahrain Islamic Bank (BisB) has been appointed as the receiving bank.

Copies of the offering prospectus and application forms are available at BisB’s financial malls at Budaiya, Arad and Riffa, besides the head office branch in the Diplomatic Area and also the Bahrain Bourse at Bahrain Financial Harbour.

The participating BisB outlets will receive completed application forms and payments.

The BD14.4 million ($38.2 million) Eskan Bank REIT is reserved for Bahraini and GCC individual and institutional investors. The minimum subscription is BD500 ($1,316 ) equating to 5,000 units, and allotment priority will be given to individual Bahraini applicants, said the bank.

The REIT comprises two initial Bahraini income-generating properties which are wholly-owned by the trust: Danaat Al Madina in Isa Town and Segaya Plaza in Manama.

It offers diversification within the real estate sector with primary exposure to retail, office and residential segments, thereby spreading the risk of owning individual properties.

The properties currently have a combined occupancy rate of over 85 per cent, and the trust intends to increase its property portfolio as and when attractive opportunities arise.

According to Eskan, the trust has a target of 6.5 per cent in net distributable income payable semi-annually. Also it offers lower risk and volatility than stocks and bonds due to long-term rents besides the opportunity to share in a stable diversified property portfolio; and liquidity by being able to easily convert units to cash.

Strict regulatory oversight is being provided by the Central Bank of Bahrain and the Bahrain Bourse, stated the housing finance bank.

The IPO will be followed by a listing of the REIT on the Bahrain Bourse, which is targeted for January 2. Investors will have the flexibility to trade their units on the BHB, with a dedicated market maker providing additional liquidity on an ongoing basis, it added.-TradeArabia News Service