Emirates REIT to Sell Office Park for $196M Ahead of Sukuk Deadline

Emirates REIT to Sell Office Park to TECOM for $196M as Sukuk Deadline Nears

October 1, 2024

Emirates REIT is set to sell Office Park, a Dubai Internet City property it has owned for 12 years, to TECOM Group for AED 720 million ($196 million).

Dubai-listed TECOM said it will acquire the five-building Grade A commercial property subject to an agreement at the REIT’s extraordinary general meeting.

An acquisition memorandum of understanding was signed between subsidiary TECOM Investments FZ LLC and Emirates REIT, approaching the sukuk payment deadline.

Emirates REIT has already exercised a one-year extension option on the $380 million bond, which was last refinanced in 2022. A partial redemption deadline to reduce the outstanding amount to $230 million comes in December.

Nasdaq Dubai-listed Emirates REIT said it partially redeemed its sukuk following the sale of Trident Mall at Jumeirah Beach Residence (JBR) in Dubai in August, reducing outstandings to $304.73 million.

According to reports, Emirates REIT acquired the office park from Dubai Properties LLC in exchange for equity.

Global companies including Coca-Cola, Uber, Red Hat and Ticketmaster have been tenants in buildings owned by Emirates REIT since 2012.

“Dubai’s commercial and industrial real estate segment continues to exhibit strong growth, which is driving up occupancy rates and leading to significant increases in rental rates,” TECOM said in a Dubai Financial Market (DFM) report.

According to Emirates REIT, a portion of the net sale proceeds will be utilized to partially redeem Secured Sukuk Certificates issued on December 12, 2022, subject to certain terms and conditions.

“The transaction is part of Emirates REIT’s ongoing de-leveraging strategy, taking advantage of the current favorable market conditions, following the recent sale of Trident Grand Mall in July,” according to the press release.