Dubai Holding to raise up to $487 million from Residential REIT's IPO

Economy ME

13-05-2025

Dubai Holding, through its wholly owned subsidiary DHAM REIT Management LLC, announced today the offer price range per unit and the start of the subscription period for the IPO of Dubai Residential REIT on the
Dubai Financial Market
.
The company is seeking to raise up to AED1.79 billion ($487 million) by setting the offer price range between AED1.07 and AED1.10 for a total of 1,625,000,000 shares, representing 12.5 percent of Dubai Residential REIT's issued unit capital. This range values the Dubai Residential REIT between AED13.9 billion and AED14.3 billion.
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 of AED21.63 billion, almost double the combined GAV of the five largest REITs in the region.
Subscription opens today
Dubai Residential REIT's IPO consists of two tranches. The first tranche, the UAE retail offer, is allocated 10 percent of the offer units, representing 162,500,000 shares, and is open to retail investors and eligible entities holding a National Investor Number (NIN) with the DFM.
Meanwhile, the second tranche, the institutional offering, is allocated 90 percent of the offer units or 1,462,500,000 shares, and is open to qualified institutional 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 shares, provided that the total number of shares 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 Dubai Residential REIT IPO from today, May 13, to May 20. 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 May 21.
The completion of the Dubai Residential REIT IPO and admission of shares to trading on the DFM is expected to take place on or around May 28, said Dubai Holding. The units are expected to trade under the symbol 'DUBAIRESI'.
Shariah-compliant offering
Dubai Residential 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 also issued a fatwa confirming that, in its view, the offering is compliant with Shariah principles.
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Dubai Residential REIT to distribute AED1.1 billion dividend
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 AED1.1 billion and an amount equal to 80 percent of profit.
For the financial results for the year ending December 31, 2026, and thereafter, Dubai Residential REIT intends to distribute at least 80 percent 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 percent at the bottom of the price range and 7.7 percent at the top of the price range for the year ending December 31, 2025.