PC: Construction Week Online

Strategic acquisition reinforces TECOM’s leadership in Dubai’s commercial real estate market.

TECOM Group PJSC, listed on the Dubai Financial Market (DFM: TECOM), has successfully completed the acquisition of Office Park in Dubai Internet City from Emirates REIT for an aggregate consideration of AED 720 million. This acquisition further adds premium commercial real estate assets to TECOM Group’s portfolio and reifies the company as a leader in Dubai.

The acquisition of Office Park perfectly aligns with TECOM Group’s long-term strategy of growing its asset base while maintaining robust financial performance. Having increased TECOM’s total investments in 2024 to over AED 2.7 billion, this acquisition will bring in a higher yield and value creation opportunity for the Group.

Strategic Value and Financial Impact

Located in the MENA region’s flagship technology park and a constituent of TECOM Group, Dubai Internet City is where Office Park is located. It comprises five blocks connected together, with 370,761 sq.ft of GLA. Currently 88% occupied, this office park works as a hub for international companies like Coca-Cola, Uber, and Red Hat among others. The strategic location of this property and the high occupancy rate will give TECOM Group leeway to work towards maximising rental income in Dubai, up against soaring demand for grade A commercial spaces.

TECOM Group’s CEO, Abdulla Belhoul, said: “The acquisition of Office Park reinforces TECOM Group’s strategic role in enabling Dubai’s business landscape. It confirms the Group’s leading position in the city’s commercial real estate sector, which continues to outperform global peers.”

He also mentioned that the Group can meet the increasing demand for premium commercial and industrial properties with several entities in the Group well-positioned to benefit from the business-friendly environment presented by Dubai and driven by long-term initiatives such as the Dubai Economic Agenda ‘D33’.

Office Park: Major Developments

The new Office Park design is highly characterised by a sleek and gleaming look of Dubai’s skyline, including the Palm Jumeirah, with many facilities such as retail spaces, and distinguished restaurants. The property currently produces annual revenue that reaches and exceeds AED 60 million, which TECOM Group shall capture from Q4 2024.

Key metrics:

-High occupancy rate of 88% and still plenty of growth.

-Tenant commitments for long-term lease leases ensure stable income streams

-Over 800 car parking facilities, thereby enhancing tenant and visitor convenience

TCOM Group believes it has tremendous scope in yield and occupancy optimization to be further leveraged for returns on capital invested. With customer commitments coupled with additional lease terms of over two years, Office Park is well-positioned for revenue growth.

Financing and Strategic Vision

The acquisition was financed from TECOM’s retained earnings and available credit facilities. TECOM Group has a sound financial position, anchored by good leverage ratios and liquidity, and is thus capable of executing strategic acquisitions in line with long-term goals. The company still adheres to the market regulations as well as best international practice in governance.

The continued buying by TECOM has seen its position as a significant player in Dubai’s emerging commercial real estate landscape.