Emirates Strategic Investments Company (Esic) has announced that it has acquired two iconic, income-generating, mixed-use properties in the UAE, one of a series of investments to be funded by last year’s successful issuance of the company’s $600 million sukuk.
An Abu Dhabi firm with investment interests in the financial, aviation and property sectors, Esic is fully owned by Sheikh Mansour bin Zayed, Deputy Prime Minister and Minister of Presidential Affairs.
The Dh1 billion ($272 million) property purchase comprises a total of 1,352 residential and commercial units spanning a built-up area (BUA) of 238,800 sq m and carries an expected net yield of more than 8 per cent.
The deal was funded by Esic’s Dh2.2 billion ($600 million) debut sukuk that was issued in July 2019 to a warm reception from investors. The five-year Sharia-compliant instrument was part of Esic’s $1 billion sukuk programme, which is listed on the London Stock Exchange.
It was priced upon launch with a 3.939 percent profit rate, which was 35 basis points tighter than initial estimates. The sukuk was in great demand, with more than 135 investors from more than 20 countries showing interest, leading to the offering being 6.2 times oversubscribed at an overbook of Dh13.6 billion ($3.7 billion).
The recent property purchases are situated in prime locations within the UAE and represent significant opportunities for resilient income streams. These two factors distinguished the assets to Esic’s leadership team.
"Esic was established to support Abu Dhabi Economic Vision 2030 and other strategic initiatives of the UAE," remarked its CEO Khalid Deemas Al Suwaidi.
"Real estate is a key component of Esic’s diversification strategy. By identifying quality assets and acquiring them at the optimal moment, we bring great value for our sukuk investors. This latest purchase reflects our deep commitment to the continued bolstering of our real-estate portfolio with high-quality, high-yield assets," he stated.
Al Suwaidi said this deal was part of Esic’s plan for a series of strategic acquisitions, which will not only expand its real- estate portfolio, but also branch into sectors such as aviation and Government-backed clean energy initiatives.
The company intends to make further acquisition announcements at its upcoming investor conference, he added.
The sukuk investors included banks, fund managers and investment funds from across the GCC and around the world.
Esic’s extraordinary success with the medium-tern note, MTN, funding programme is expected to pave the way for other UAE-based private entities to access international capital markets, as well as promote the development of Islamic finance in the country.-TradeArabia News Service