Dubai Holding announces offer price range and start of subscription period for Dubai Residential REIT's IPO
The REIT expects to distribute at least AED 1,100 million in dividends for 2025, rising to 80% of profit before fair value changes in investment property by 2026
The price range implies a 2025 gross dividend yield of 7.9% at the low end and 7.7% at the high end
The Offering subscription period starts today, 13 May 2025, and closes on 20 May 2025
The International Offering Memorandum is published today
The final offer price will be determined following the book-building process, expected to be announced on 21 May 2025
Dubai, UAE: Dubai Holding, through its wholly owned subsidiary DHAM REIT Management LLC (the 'Fund Manager'), today announces the offer price range per unit (the 'Units', and each a 'Unit')(the 'Offer Price Range') and the start of the subscription period for the initial public offering ('IPO' or the 'Offering') of Dubai Residential REIT, a Shariah-compliant income-generating closed-ended real estate investment fund under establishment and one of the largest owners and operators of residential real estate in Dubai (the 'REIT'), on the Dubai Financial Market ('DFM').
DETAILS OF THE OFFER PRICE RANGE
The Offer Price Range has been set at between AED 1.07 and AED 1.10 per Offer Unit (the 'Offer Unit'). A total of 1,625,000,000 (one billion six hundred and twenty-five million) Units, representing 12.5% of Dubai Residential REIT's issued unit capital being offered by DHAM Investments LLC (the 'Selling Unitholder'), a subsidiary of Dubai Holding, and the current sole unitholder of the REIT. The Fund Manager reserves the right to amend the size of the Offering at any time prior to the end of the subscription period in its sole discretion, subject to the applicable laws of the UAE and the approval of the SCA.
The total Offering size is expected to be between AED 1,739 million (USD 473 million) and AED 1,788 million (USD 487 million), implying a market capitalisation at listing of between AED 13.9 billion (USD 3.8 billion) and AED 14.3 billion (USD 3.9 billion).
SUBSCRIPTION PROCESS
Dubai Residential REIT's Offering consists of two tranches:
The First Tranche, the UAE Retail Offer, is allocated 10% of the Offer Units, representing 162,500,000 (one hundred sixty two million and five hundred thousand) Units, and is open to retail investors and eligible entities holding a National Investor Number (NIN) with the DFM
The Second Tranche, the Institutional Offering, is allocated 90% of the Offer Units, representing 1,462,500,000 (one billion four hundred sixty two million and five hundred thousand) Units, and is open to qualified institutional investors ('Professional Investors') outside the United States under Regulation S, subject to 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 from today, 13 May 2025, to 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 Unitholder, 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 (the "Public Announcement"), and in an English-language international offering memorandum (the "International Offering Memorandum"), all available at http://ipo.dubairesidential.ae/.
Citigroup Global Markets Limited, Emirates NBD Capital PSC, and Morgan Stanley & Co. International plc have been appointed as Joint Global Coordinators and Joint Bookrunners. Emirates NBD Bank PJSC has been appointed as the Lead Receiving Bank. Abu Dhabi Commercial Bank PJSC, Arqaam Capital Limited acting in conjunction with Arqaam Securities LLC, and First Abu Dhabi Bank PJSC are acting as joint bookrunners (together with the Joint Global Coordinators, the "Banks") for the Offering.
Pursuant to an underwriting agreement entered into between Dubai Residential REIT, the Selling Unitholder, the Fund Manager and the Banks (the "Underwriting Agreement"), the Selling Unitholder will be subject to a lock-up (in connection with the Units) from the date of the Underwriting Agreement up to 180 days after Admission, subject to certain customary carveouts and consent by 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 LLC, 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 LLC.
SUMMARY OF DUBAI RESIDENTIAL REIT'S INVESTMENT PROPOSITION
Dubai Residential REIT is the GCC's first pure-play listed residential leasing-focused REIT and, at the time of listing, is also expected to be the GCC's largest listed REIT, with a gross asset value ('GAV') of AED 21.63 billion, almost double the combined GAV of the five largest REITs in the region.
The REIT manages 35,700 residential units strategically positioned in key catchment areas across Dubai, making it one of the largest residential real estate owners and operators in Dubai and the benchmark for residential real estate in the Emirate. The residential portfolio is diversified across multiple locations, property types and price segments through a range of multi-family and single-family offerings that cater to the broad and growing residential needs of Dubai residents across varying income levels.
The Shariah Supervision Committee of Dubai Residential REIT has issued a fatwa confirming that, in its view, both the REIT and the Offering are compliant with Shariah principles. The Internal Shariah Supervision Committee of Emirates NBD Bank PJSC has issued a fatwa confirming that, in its view, the Offering is compliant with Shariah principles.
Dubai Residential REIT has demonstrated strong cash generation, driven by topline growth, improving margins, and high cash flow conversion. Its real estate portfolio continues to generate strong free cash flow after capital expenditure, benefiting from the recent completion of major investment programs. With a prudent capital structure and conservative leverage policy, the REIT maintains strategic flexibility and cost optimisation across market cycles.
Subject to the REIT Board's approval and other provisions of the UAE prospectus, Dubai Residential REIT intends to adopt a semi-annual dividend distribution policy, making payments in April and September of each year, starting from September 2025. The REIT expects that the sum of its first two dividend payments, expected to be made in September 2025 and April 2026, will be the higher of: (i) AED 1,100 million; and (ii) an amount equal to 80% of profit for the period before changes in fair value of investment property, in respect of its financial results for the year ending 31 December 2025, subject at all times to Board approval. For the financial results for the year ending 31 December 2026 and thereafter, Dubai Residential REIT intends to distribute at least 80% of profit for the period before changes in fair value of investment property for each accounting period, subject to Board approval.
As such, the Offer Price Range implies a gross dividend yield of 7.9% at the bottom of the price range and 7.7% at the top of the price range for the year ending 31 December 2025.
Dubai Residential REIT's properties are actively managed by experienced teams with a long-standing track record focused on actively engaging tenants, enhancing the value proposition of managed communities, increasing cash flow and reducing risks.
As part of the Dubai Holding ecosystem, the REIT benefits from Dubai Holding Group's broad capabilities within the real estate sector, including development, asset management, facilities management and community management, making it well-positioned to achieve sustainable growth and deliver attractive returns to investors.
IPO TIMELINE
Close of Book Building: 20 May 2025
Final Offer Price Announcement: 21 May 2025
Allocation of Offer Units to the First Tranche: 26 May 2025
Refunds: 26 May 2025
First Day of Trading: 28 May 2025
Emirates NBD Bank PJSC has been appointed as the Lead Receiving Bank. Abu Dhabi Commercial Bank PJSC, Abu Dhabi Islamic Bank PJSC, Al Maryah Community Bank LLC, Commercial Bank of Dubai, Emirates Islamic Bank PJSC, First Abu Dhabi Bank PJSC, and Mashreq Bank PSC have also been appointed as Receiving Banks.
For more information about the Offering, please visit: http://ipo.dubairesidential.ae/
Media Contact
Jeehan Balfaqaih / Jamil Fahmy
Partner
Brunswick Group
dubairesidential@brunswickgroup.com
About Dubai Residential
Dubai Residential stands at the forefront of Dubai's residential leasing sector, managing one of the city's most diverse portfolios as part of Dubai Holding Asset Management. From the premium residences at Bluewaters and City Walk to the family-focused communities of The Gardens, Garden View Villas, Remraam, Layan, Ghoroob, Shorooq, and Nad Al Sheba Villas, its 21 vibrant, fully integrated communities comprising over 35,000 homes cater to the unique lifestyle and preferences of more than 140,000 residents. Dubai Residential is committed to innovative urban development, enhancing the city's appeal while contributing to its long-term growth vision.
To learn more about its portfolio, visit: https://dubairesidential.ae/
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