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Emirates REIT is to sell Office Park, a Dubai Internet City asset it has owned for 12 years, to TECOM Group for AED 720 million ($196 million) as the REIT approaches a sukuk deadline.
Dubai-listed TECOM said it was acquiring the five-building Grade A commercial asset subject to agreement at the REIT’s extraordinary general assembly.
The acquisition MOU has been signed between subsidiary TECOM Investments FZ LLC and Emirates REIT, which is approaching a sukuk payment deadline.
Emirates REIT has already exercised a one-year extension option on the $380 million bond, which was last refinanced in 2022. A partial redemption deadline to reduce the outstanding amount to $230 million comes up in December.
The Nasdaq Dubai-listed Emirates REIT said it had partially redeemed its sukuk in August following the sale of Trident Mall in Jumeirah Beach Residence (JBR) in Dubai, reducing the outstanding amount to $304.73 million.
According to reports, Emirates REIT acquired Office Park from Dubai Properties LLC in exchange for a stake.
Global companies including Coca-Cola, Uber, Red Hat, and Ticketmaster are among tenants in the buildings, owned by Emirates REIT since 2012.
“The Dubai commercial and industrial real estate segment continues to demonstrate robust growth, which is driving occupancy rates higher and leading to a notable increase in rental rates,” TECOM said in a Dubai Financial Market (DFM) statement.
A statement from the Emirates REIT said a portion of net sale proceeds will be used to partially redeem the secured sukuk certificates issued on 12 December 2022, in line with the terms and conditions.
“Following the recent sale of Trident Grand Mall in July, this transaction is part of Emirates REIT’s ongoing de-leveraging strategy, taking advantage of current favorable market conditions,” the statement noted.
(Writing by Imogen Lillywhite; editing by Seban Scaria)
