
Dubai Holding, through its wholly owned subsidiary DHAM REIT Management (Fund Manager), has announced an increase in the offering size of Dubai Residential REIT’s initial public offering (IPO). The approval was granted by the UAE Securities and Commodities Authority (SCA).
Dubai Residential REIT is a Shariah compliant income-generating closed-ended real estate investment fund that is currently in the establishment phase. It is one of the largest owners and operators of residential real estate in Dubai. The REIT will now float 15.0% of its issued unit capital, instead of the previously announced 12.5%, said a statement.
DHAM REIT Management exercised its right to increase the number of units driven by the strong demand from domestic and international investors and over-subscription 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 per offer unit, the revised offering size is expected to be between US $568mn and $584mn, implying a market capitalisation at listing of between $3.8bn and $3.9bn.
Dubai Residential REIT’s Offering, as previously announced, comprises two tranches. The revised offering size is as follows, 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 Dubai Financial Markets (DFM). The Second Tranche, the Institutional Offering, has been increased from 1,462,500,000 units to 1,787,500,000 units. This tranche is open to qualified institutional investors (Professional Investors) outside the United States, subject to Regulation S, 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. Investors in both tranches can subscribe to the offering which will close on 20 May 2025. 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 Unit holder, and is expected to be announced on 21 May 2025.
The completion of the offering and admission of units to trading on the DFM (Admission) is expected to take place on or around 28 May 2025. The units are expected to trade under the symbol ‘DUBAIRESI’. The details of the offering are available in the prospectus and public subscription announcement (Public Announcement), and in an English-language international offering memorandum (International Offering Memorandum).
Dubai Residential REIT, subject to the approval of the REIT Board and other provisions outlined in the UAE prospectus, said that it plans to implement a semi-annual dividend distribution policy, with payments made in April and September of each year, commencing in September 2025. For the financial results of the year ending 31 December 2026, and beyond, Dubai Residential REIT intends to distribute at least 80% of its profit for each accounting period, subject to Board approval. The Offer Price Range suggests a gross dividend yield of 7.9% at the lowest end of the range and 7.7% at the highest end for the year ending 31 December 2025.
Citigroup Global Markets, Emirates NBD Capital PSC, and Morgan Stanley & Co. International have been appointed as Joint Global Coordinators and Joint Bookrunners. Emirates NBD Bank has been appointed as the Lead Receiving Bank. Abu Dhabi Commercial Bank, Arqaam Capital Limited acting in conjunction with Arqaam Securities, and First Abu Dhabi Bank are acting as joint bookrunners (together with the Joint Global Coordinators, Banks) for the offering, Abu Dhabi Islamic Bank, Al Maryah Community Bank, Commercial Bank of Dubai, Emirates Islamic Bank, Mashreq Bank have also been appointed as Receiving Banks.
Pursuant to the Underwriting Agreement, the Selling Unitholder will be subject to a lock-up on the units from the date of the agreement until 180 days after admission, subject to certain customary carveouts and consent from the Joint Global Coordinators. Dubai Residential REIT will also be subject to a lock-up for the same duration.
In connection with the offering, the selling unitholder will allocate proceeds from the sale of up to 243,750,000 offer units to xCube, a DFM-authorised price stabilisation manager appointed by the Fund Manager. These proceeds may be used, in accordance with applicable laws and DFM Trading Rules, to conduct stabilisation transactions on the DFM. The banks and their respective directors, officers, employees, agents, and affiliates will not be involved in, responsible for, or benefit from any such transactions, which will be carried out solely by xCube.
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Source: ME Construction News