Dubai’s AMCREIT Aims to Expand Portfolio with Healthcare Acquisitions, Triple Assets.
Dubai-listed Al Mal Capital REIT (AMCREIT) aggressively pursues the bid to be allowed to open up foreign ownership up to 30% as part of ambitions to triple assets and expand its investment portfolio. According to the Managing Director, Sanjay Vig, he is optimistic about his ability to bring more REITs to the UAE market, thinking that more awareness and competition would help him position AMCREIT with other strong REITs.
PC: Dubai Investments
AMCREIT is looking to increase its assets from AED 1 billion to AED 3 billion in the next few years, adding six to seven new assets, including two healthcare properties slated for 2025,” Vig said. Healthcare, education, and industrial assets are witnessing a priority over other categories and will go well with AMCREIT’s existing portfolio, which comprises five schools based in the UAE.
Opening the REIT up to foreign ownership will unlock large upside and drive greater interest in the market, said Vig. AMCREIT is presently 70 percent owned by Dubai Investments, and discussions with regulators are already underway to make this possible. Regulatory approvals by SCA and the land departments of various emirates will be required, Vig added.
In comparison, a much larger other Dubai REIT, Emirates REIT also has had refinancing problems with sukuk but this REIT recently announced a higher dividend to AED 15.4 million payable in June 2025 and increased that amount by over AED 3 million compared with December 2023. The company more than doubled its dividend on AMCREIT from 5.5% in its first year of operations (2021) to 7% and aims to maintain that rate.
UAE REIT regulations do permit investing abroad, but only to the extent of up to 25% of its total investments. However, Vig once again clarified that for now, though focus will remain within the emirates. A probable future destination in this regard would be Saudi Arabia, though its burgeoning education sector renders it the more attractive proposition. Competition in the kingdom from existing REITs is not an immediate concern.
Ambit has challenged the ability to raise capital at cost due to regulatory restrictions, which enforce a cap on leverage at 50% by SCA rules. This means that the potential for issue of sukuk is restricted unless the assets of AMCREIT would cross $1 billion for meeting benchmark size of sukuk of $500 million. Vig also stated that lack of foresight amongst other REITs already in existence in the market and lack of awareness about REIT in the UAE is likely to restrict growth.
Highlighting the need for stability as key to investor confidence, Vig points out that in education assets, the threat of bankruptcy is particularly low, due to the rising school fees and long-term leases with a good returns guarantee. Predictable and stable returns are crucial, said he, especially since AMCREIT positions itself to grow along with awareness and, in turn, with confidence in UAE REITs.
