Equitativa, the largest REIT (real estate investment trust) manager in the Gulf, has announced that it has acquired three additional fully leased floors in Index Tower, an 80-storey building located in Dubai, for its Emirates REIT portfolio, at a purchase price of Dh106.5 million ($29 million).

Emirates REIT expects the transaction to generate an estimated internal rate of return (IRR) of 12 per cent, with an annual yield of  10 per cent for the new floors.

Following the acquisition, Emirates REIT's total portfolio will reach Dh3.5 billion, comprising 11 properties across Dubai, said a statement from Equitativa.

Post transaction, the occupancy rate of Index Tower offices will increase to 50 per cent, it stated.

The newly-acquired floors are leased with a weighted average unexpired lease term (WAULT) of three years. This will enhance Emirates REIT’s multi-tenant diversification and stability model, which is mostly made up of Grade A office space, retail and educational property, with a current new total net leasable srea (NLA) of 2.4 million sq ft in the portfolio.

Emirates REIT, which is currently the world's largest shari'a compliant REIT and listed on Nasdaq Dubai, previously owned 17.5 office floors and their associated car parking spaces in Index Tower.

This latest acquisition of the full space on levels 26, 27 and 28 of the tower adds to Emirates REIT’s portfolio a NLA of 58,156 sq ft of office space and 135 parking bays allocated to these floors. The transaction increases Emirates REIT’s NLA in Index Tower to 432,930 sq ft.

Equitativa Group chairman Sylvain Vieujot said: "We are very pleased to have completed this acquisition. It complements our portfolio of grade A offices and delivers an attractive yield whilst increasing Emirates REIT's Funds From Operations (FFO)."

Index Tower is an award winning, iconic 80-storey building, located in DIFC, at the heart of the Central Business District, he stated.

It features residential, offices and retail components, of which Emirates REIT now owns 85 per cent of the offices, over 1,561 car parking spaces and over 63,000 sq ft of retail, he added.-TradeArabia News Service