Dubai Holding, through its wholly owned subsidiary DHAM REIT Management, today announced that it increased the offering size of the initial public offering (IPO) of Dubai Residential REIT. 

 

This follows approval from the UAE Securities and Commodities Authority (SCA). 

 

The IPO sixe will now increase to 1,950,000,000 units from 1,625,000,000 units, which would result in floating 15% of the REIT’s issued unit capital, instead of the previously announced 12.5%, a statement said.

 

Dubai Residential REIT is a Shariah-compliant income-generating closed-ended real estate investment fund under establishment and one of the largest owners and operators of residential real estate in Dubai.

 

DHAM REIT Management exercised its right to increase the number of units driven by the strong demand from domestic and international investors and oversubscription across all tranches. Upon listing on the Dubai Financial Market (DFM), DHAM Investments, a subsidiary of Dubai Holding, will continue to own a majority 85% stake in the REIT.

 

Based on the unchanged Offer Price Range of AED1.07 to AED1.10 per Offer Unit, the revised offering size is expected to be between AED2,087 million ($568 million) and AED2,145 million ($584 million), implying a market capitalisation at listing of between AED13.9 billion ($3.8 billion) and AED14.3 billion ($3.9 billion).

 

SUBSCRIPTION PROCESS

As previously announced, Dubai Residential REIT’s Offering consists of two tranches. The revised offering size entails the following: 

1. The First Tranche, the UAE Retail Offer, remains unchanged at 162,500,000 units, and is open to retail investors and eligible entities holding a National Investor Number (NIN) with the DFM.

2. The Second Tranche, the Institutional Offering, is increased from 1,462,500,000 units to 1,787,500,000 units, and is open to qualified institutional investors (Professional Investors) outside the United States under Regulation S, subject to applicable UAE laws and SCA approval.

 

Each successful Subscriber in the First Tranche will be guaranteed a minimum allocation of 2,000 units, provided that the total number of units issued under the minimum guaranteed allocation does not exceed the tranche size and remains within the limits and conditions set out in the prospectus, it said.

 

Investors in both tranches can subscribe to the offering, which opened on May 13, and will close on May 20. The final offer price will be determined through a book-building process conducted in consultation with the Joint Global Coordinators, the Fund Manager and the Selling Unitholder, and is expected to be announced on May 21.

 

The completion of the Offering and admission of units to trading on the DFM is expected to take place on or around May 28. The units are expected to trade under the symbol “DUBAIRESI”. -TradeArabia News Service