Equitativa, a UAE-based asset management firm, said it has joined hands with Ras Al Khaimah-based Al Hamra Real Estate Development and Dubai's National Bonds Corporation to launch the country's first residential real estate investment trust (REIT).

The Residential REIT, established and managed by Equitativa, is incorporated in the Abu Dhabi Global Market (ADGM) and regulated by the Financial Services Regulatory Authority.

It is a Shari'ah-compliant real estate investment trust, which distributes at least 80 per cent of its net income to shareholders. Equitativa expects to raise further funds allowing the REIT to buildup a large portfolio in order to prepare for an IPO.

As a founding shareholder along with National Bonds Corporation, Al Hamra Real Estate Development has contributed 371 residential units consisting of a mix of apartments, duplexes, townhouses and villas located in Al Hamra Village, Ras Al Khaimah.

The portfolio comprises 472,250 sq ft of net leasable area in one of the most attractive communities in the emirate. It has a strong mix of both private tenants and corporate tenants with varying tenures.

The National Bonds, on the other hand, contributed a building with 112 units, made up of studio and one-bedroom apartments, collectively known as ‘Barton House’ located in Dubai’s Motor City.

These units comprise a total of 86,239 sq ft of net leasable area. The contributed properties have 95 per cent occupancy and a total value of Dh418 million ($113 million).

An additional property valued at Dh99 million ($27 million) has already been secured, bringing the total portfolio value to Dh517 million ($141 million). An individual cash investor also invested in the residential REIT.

“We want to thank Al Hamra and National Bonds for their trust and partnership with Equitativa. We believe this is the right time to enter the residential market and launch the Residential REIT," said Sylvain Vieujot, the chairman of Equitativa.

"Residential yields are attractive in the current environment and are expected to provide medium term upside. There continues to be significant interest in REITs across the region from both institutional and private investors,” he stated.

Benoy Kurien, the general manager of Al Hamra Group, said the royal decree allowing Equitativa to invest in Ras Al Khaimah’s onshore property pool has enabled the company to put its strong and high-yielding real estate portfolio into this REIT structure as well as open up the emirate to institutional investment.

"There continues to be good investment opportunities for residential commercial and hospitality assets in Ras Al Khaimah and we look forward to supporting Equitativa in sourcing such assets in the future," he observed.

National Bonds CEO Mohammed Qasim Al Ali said: "REITs are a perfect structure for us as they have many of the characteristics of our unique savings and investments scheme. By putting our real estate assets into a REIT structure, with a proven reals estate trust manager, we can combine consistent asset growth with strong dividend cash returns."

"We look forward to developing a strong relationship with Equitativa as they build out the portfolio over the coming years," he added.
 
Equitativa (AD) is a part of the Equitativa Group which also owns Equitativa (Dubai), the founder and Reit manager of Emirates REIT.

Emirates REIT is the UAE’s first regulated shari'ah-compliant real estate investment trust, listed on Nasdaq Dubai with a Dh2.8 billion ($762 million) portfolio of office buildings, schools and retail assets.

"We congratulate Equitativa on launching its second REIT and setting new benchmarks in the REITs market," remarked Ahmed Ali Al Sayegh, the chairman of Abu Dhabi Global Market.
 
As an international financial centre, ADGM understands the importance of providing an efficient and well-regulated framework that offers a comprehensive suite of investment vehicles, such as REITs and business trusts, to support the needs of businesses and investors, he stated.

"We welcome more innovative issuers like Equitativa to join the ADGM family and take advantage of the benefits of our investment offerings and the vibrancy of our financial centre," he added.-TradeArabia News Service