Abu Dhabi-based Emirates Strategic Investments Company (ESIC) has acquired two income-generating, mixed-use properties in the UAE for $272m, as part of a series of investments that will be funded by the company’s $600m (AED2.2bn) debut sukuk issued in July 2019.
The purchased properties comprise a total of 1,352 residential and commercial units, spanning a built-up area (BUA) of 238,800m2, and carries an expected net yield of more than 8%.
The company, which is owned by HH Sheikh Mansour Bin Zayed Al Nahyan, has stated that the properties are situated in prime locations within the UAE, and represent significant opportunities for resilient income streams.
The July 2019 five-year Sharia-compliant sukuk was part of ESIC’s $1bn (AED3.67bn) sukuk programme, which is listed on the London Stock Exchange. It was priced upon launch with a 3.939% profit rate, which was 35 basis points tighter than initial estimates.
The sukuk was received well, with more than 135 investors over 20 countries showing interest, leading to the offering being 6.2 times oversubscribed at an overbook of $3.7bn (AED13.6bn).
The sukuk investors included banks, fund managers, and investment funds from across the GCC and around the world, according to the state news agency, Wam.
Commenting on the property purchases, the chief executive officer of ESIC, Khalid Deemas Al Suwaidi, said:
“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.”
The deal is 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.