Emirates REIT signs acquisitional leaseback deal with GEMS Education - IFN

Emirates REIT signs acquisitional leaseback deal with GEMS Education

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UAE: Shariah compliant real estate investment trust (REIT), Emirates REIT has successfully completed its acquisition of a leasehold interest in GEMS World Academy in Al Barsha, Dubai. The school campus was purchased via an acquisition leaseback deal with GEMS Education (GEMS). By virtue of the said contract, Emirates REIT shall own the facilities and related assets of the property while GEMS remains as the sole operator and manager of the educational facility. As a yield-accretive venture, the acquisition represents approximately 25% of Emirates REIT’s income stream. The transaction has managed to increase the value of the investment firm’s portfolio to over AED1.1 billion (US$299.45 million). Abdulla Ali Al Hamli, the chairman of Emirates REIT, stated that the acquisition was a ‘win-win’ for both parties as the firm was investing in a very stable income-generating asset. “We set out to grow our assets under management to over AED1 billion (US$272.23 million) this year and this acquisition continue our strong momentum, following quickly after the purchase of the Index Tower Retail in the DIFC,” says Abdulla. Emirates REIT’s portfolio currently consists of eight investment properties (including GEMS World Academy) that carry an average unexpired lease-term of over 10 years. Conveying an optimistic outlook on the education sector in the emirate, Nicholas Guest, the chief financial officer at GEMS, said: “The outlook for the UAE education sector remains very positive due to continued growth in the UAE economy, and we expect continued demand growth for the provision of quality education.” The sale is also expected to assist in GEMS’ development and expansion plans within UAE’s education sector. Incorporated in 2010, Emirates REIT was the GCC’s first Shariah compliant REIT. It was established by Dubai Islamic Bank and Eiffel Management as a Shariah compliant real estate investment vehicle focusing on high-quality income producing assets across Dubai. The company recently revealed plans to float an IPO on NASDAQ Dubai before the end of year.