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. 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 mn 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.
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.”
He added: “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.”
The partially undrawn facility is a five-year, profit-only Mudarabah facility with a 10% repayment of principal in its fourth year. Post utilization and full draw down of the facility, the loan-to-value ratio of the fund is expected to be below 50%.
Anthony Taylor, fund manager, real estate at Emirates NBD Asset Management, stated: “Having witnessed some stabilization of Dubai’s institutional real estate market over the recent period, we believe that the market timing for investment acquisitions is favorable.”