Sunday, August 6, 2017

ENBD REIT acquires first education asset

ENBD REIT, a real estate investment trust managed by Emirates NBD Asset Management, has acquired South View School in Dubai’s Remraam Community.

South View School will be Interstar Education’s fifth Dubai campus and its second British curriculum school, which is in line with the firm’s vision of developing high quality, affordable schools in Dubai.

ENBD REIT signed a Musataha of the plot, and will construct the school at a total transaction value of Dh55 million ($15 million). The deal marks ENBD REIT’s first acquisition of an education asset, as part of its strategy for diversifying its property portfolio into alternative real estate.

In May, the REIT acquired the Uninest Dubailand student accommodation building for Dh120 million ($33 million).

South View School, once complete, will be operated by Interstar Education, part of Interstar Advisory Services, which currently runs the successful and well-established Victory Heights Primary School in Dubai Sports City.

The total ground floor area of the school will be 132,000 sq ft on a plot covering 183,504 sq ft. The total project of approximately Dh55 million will return an initial rental yield of 9 per cent on project costs, with a fixed escalation of 4 per cent every two years throughout the lease term of nine years with further options to renew. The school pays additional rent during the construction period, equivalent to 5 per cent on drawdown, the statement said.

Tim Rose, head of real restate at Emirates NBD Asset Management, said: “We’re pleased to announce our second acquisition since listing on Nasdaq Dubai in March. This is our first education asset, and an important step in the ongoing diversification of our portfolio away from purely office and residential properties. It is a pleasure to be working with Interstar Education, a renowned and established schools operator in Dubai, and we look forward to a long and fruitful relationship. The UAE’s education sector continues to prosper and grow, and we are very proud to have become a part of that journey.”

South View School’s rental agreement is based on a FRI (Future Rent Increase) triple net lease, with the tenant covering all Opex, Capex, ground rent and associated property and community charges.

The school will open to pupils in September 2018, with works already underway on site.
Following acquisition and completion of the development, the ENBD REIT property portfolio’s total value will be $367 million, with a net asset valuation (NAV) of $292 million. - TradeArabia News Service

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