Dubai Holding, the major player in the emirate’s property market, has announced its decision to launch an Initial Public Offering (IPO) for its Real Estate Investment Trust (REIT) fund. The move is significant for the primary firm in Dubai’s real estate development and investment sector for established firms, including Nakheel, Meydan, and Meraas, which operate within Dubai Holding.
The IPO will be conducted through Dubai Residential REIT, a wholly owned subsidiary of Dubai Holding. It is expected to open for subscription from 13 May to 20 May.
The new REIT has a large portfolio of residential assets.
Dubai Property REIT owns 35,700 residential units in 21 communities, housing over 140,000 residents. With this large portfolio of properties, the REIT emerges as a serious player in the Dubai residential leasing market, an asset class where Dubai Holding has a proven track record.
And if the float is completed, it will be the largest publicly listed REIT in the Gulf Cooperation Council (GCC) upon its debut on the Dubai Financial Market (DFM). Its GAV stands at Dh21.63 billion, which they claim is “nearly double the aggregate GAV of the region’s five largest REITs combined.” This scale demonstrates the opportunity this offering represents for the local investment landscape and also reinforces Dubai Holding’s continued leadership role.
Utilizing a Pre-Existing REIT Ecosystem to Build a REIT
According to a statement released by Dubai Holding, “The REIT is supported by the wider residential ecosystem that Dubai Holding has established, a global investment leader with one of the largest land banks within the Emirate of Dubai.’ As a result, it would indicate the REIT due to its already established resources and assets within the broader Dubai Holding group.
Real Estate Investment Trusts (REITs) give investors a vehicle with which to invest in funds that own and manage a variety of property-related securities. Al Mal owns a number of REITs already listed on the DFM. Through Dubai Residential REIT, investors will be able to diversify their exposure to the Dubai property market under the supporting umbrella of Dubai Holding.
Recommended Semi-Annual Distribution Policy for New REIT
The Dubai Residential REIT plans to establish a semi-annual dividend payment policy, which would provide dividends each April and September starting September 2025. The value of the normal income to the investors under the proposed policy shows the large base of the stable asset under the Dubai Holding structure.
The REIT has also provided its expectations regarding the aggregate amount of its first two dividends. The total is reflected to be higher than Dh1. This is in relation to its financial results for the year ending December 31, 2025: 10 billion, or 80% of profit for the period before adjustment in the fair value of investment property. This guidance provides investors with a first view of what a dividend could return from an entity that is part of Dubai Holding.
Combining Strategic Residential Assets to Scale Within the REIT
Amit Kaushal, Group CEO, Dubai Holding, said, “The merger of Nakheel & Meydan’s residential portfolios under Dubai Holding last year was a significant milestone in Dubai Residential’s journey that elevated it to become one of the largest residential leasing platforms in the region.” He added, “Dubai Residential, Dubai Holding Asset Management’s residential leasing portfolio, has always core strength in providing communities that respond to the changing demand of Dubai’s population.
“The IPO gives investors access to a truly differentiated investment opportunity — becoming part of this success story, but also the wider capabilities and opportunities that exist within the broader Dubai Holding ecosystem,” added Mr. Kaushal. The merger of the residential portfolios of Nakheel and Meydan under the Dubai Holding umbrella last year is cited as a key driver behind the size and opportunity that Dubai Residential REIT provides.
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Other Key Insights
This IPO will see the issuance of a total of 1.62 billion units in Dubai Holding, representing 12.5% of the issued unit capital of Dubai Residential REIT. The offering consists of two separate tranches. Tranche 1: the UAE Retail Offer, which is intended for all retail investors and entities with a DFM National Investor Number (NIN). The second type is for institutional investors.
10% of the total offer units have been allocated to Tranche 1 (i.e., 162.5 million units). Under this minimum guaranteed allocation, each successful subscriber shall have a guaranteed allocation of a minimum of 2000 units under this minimum guaranteed allocation per tranche unless and until the aggregate number of units issued under this minimum guaranteed allocation exceeds the aggregate number of units per tranche. Allocate to the second tranche the remaining 90% of offer units for a total of 1.46 billion units. After the IPO, Dubai Residential REIT will have 87.5% post-IPO issued unit capital that is owned by DHAM Investments.
The finalization of the IPO launch of Dubai Residential REIT represents a natural evolution in our story, and Malcolm Al Malek, Chairman of the Investment Committee of DHAM REIT Management and Group CEO of Dubai Holding Asset Management, said, “The decision to launch the IPO of Dubai Residential REIT marks a natural step forward for our story—providing investors with a unique opportunity to participate in the GCC’s largest and first pure-play listed residential leasing-focused REIT.” “That makes this offer a substantial enabler for more investors to join Dubai’s vibrant real estate growth story,” he added.
Dubai Holding is expected to launch this IPO to offer investors an important route to accessing the mature Dubai residential property market through large and transparent structures. The offering scale and underlying asset base indicate a potentially significant addition to the REIT universe in the region.
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