DUBAI, Emirates Real Estate Fund (EREF) has procured a AED700 million ($190.6 million) Shari’ah compliant finance facility with Emirates NBD, on attractive commercial terms.
The partially undrawn facility is a five-year, profit-only Mudharabah facility with a 10 per cent repayment of principal in its fourth year. Post utilisation and full draw down of the facility the loan-to-value ratio of the fund is expected to be below 50 per cent. The new facility will help contribute to restructuring the balance sheet and creating a more efficient capital structure with the aim of ultimately enhancing returns to investors.
Commenting on the new facility, Tariq Bin Hendi, CEO of Emirates NBD Asset Management, said, “While Emirates Real Estate Fund and Emirates NBD Bank are two separate entities, the close relationship that exists between them helps to provide the fund with access to important benefits, including financing. This new facility will support our core objective of delivering improved returns for investors, while giving us the capacity to complete strategic acquisitions to boost the value of the fund to investors.”
EREF’s fund manager, Emirates NBD Asset Management, has earmarked a portion of the partially undrawn facility for future acquisitions. Over the last 24 months the fund has invested over $163 million in real estate acquisitions including Binghatti Terraces in Dubai Silicon Oasis, Arabian Oryx House in Al Barsha Heights, part of Burj Daman Office Tower in the DIFC and a residential building in Remraam, Dubailand.
Source: Emirates News Agency