ENBD REIT Divests Dubai Towers in Strategic Turnaround

Overview of the Sale

ENBD REIT announced that it had successfully closed the sale of two residential towers, Al Ramth 57 and 59, at the Remraam area in Dubai. The sale is an intrinsic part of a wider strategic plan by the REIT to drive its growth trajectory. Divestment would also support the REIT’s ongoing efforts toward restructuring and optimization of its asset portfolio for future growth.

While the exact amount for which the property was sold has not been revealed, all of the money from the sale has been used to pay off the REIT’s debt. This has helped cut the REIT’s loan-to-value ratio from 51 percent to 49.4 percent, making its position stronger.

PC: ZAWYA

Details of the Towers

The two properties that were sold, Al Ramth 57 and 59, are a part of the Dubailand development, a very popular area of Dubai. These residential towers have a combined net leasable area of 112,154 square feet and contain 105 residential units. At the time when these towers were acquired by ENBD REIT during September 2015, they accounted for around 4 percent of the REIT’s portfolio value. The decision to sell these assets falls directly in line with the strategic priority of ENBD REIT, which considers optimizing its asset base as critical to increasing the overall financial stability and therefore to achieving a well-balanced, robust portfolio.

REIT Impact

This sale of Al Ramth 57 and 59 marks an important milestone in ENBD REIT’s proactive approach toward asset management. The proceeds will be used to retire debt. Hence, in addition to its strengthening of the balance sheet, this REIT is also improving some of its key financial metrics. This move forms a crucial part of the comprehensive turnarounds in trying to maximize portfolio value through strategic optimization. The reduction in leverage should bode well for the overall financial health of this REIT. Lower leverage means there is much greater operational flexibility, which provides an opportunity for this REIT to position itself for long-term sustainable growth. This strategic shift will further open other investment opportunities aligned to the objectives of growth for ENBD REIT.

Strategic Outlook

Looking ahead, ENBD REIT continues to be focused on the strategic vision for growth and portfolio optimization. On a go-forward basis, the REIT would be continuing with its efforts in targeting investment opportunities and strategic rebalancing to secure further value creation and long-term success. This transaction makes a statement regarding ENBD REIT’s commitment toward sticking to its strategic goals and its proactive attitude toward the management and optimization of its asset portfolio.

The successful sale of Al Ramth 57 and 59 is a thought-out and strategic step taken by ENBD REIT toward greater financial stability and property portfolio optimization. The REIT deleverages while managing its assets strategically, better positioning it to strive toward growth objectives and take advantage of future investment opportunities. The deal not only underlines the REIT’s focus on active asset management, but also sets the stage for further progress and growth in the near future.