By Staff writer
Listed real estate investment trust will fund development of school in Damac's Akoya project in Dubai
Emirates REIT, the Shariah-compliant real estate investment trust listed on NASDAQ Dubai, announced on Monday that it has acquired a freehold land plot and will fund the development of a new school in the Akoya project being developed by Damac Properties.
Emirates REIT said it has agreed with Jebel Ali School, one of the oldest schools in the UAE, to build and enter into a 26-year lease for their new school facility.
Emirates REIT acquired the freehold land plot from Damac Crescent Properties for AED98.5 million ($26.8 million) and immediately leased it to Jebel Ali School, providing an initial net income in excess of 10 percent of the acquisition costs of the plot, a statement said.
Emirates REIT simultaneously entered into an Istisna agreement with Jebel Ali School, to build their new facility.
The construction of the school facilities is estimated to cost approximately AED109.8 million, bringing the total invested to AED208.3 million ($56.7 million).
The new educational facility will include a foundation, primary and secondary school, as well as a sports centre and an auditorium.
This acquisition comes at a time when Dubai is experiencing robust growth in demand for high quality education. The Knowledge and Human Development Authority estimates a requirement of an additional 52 educational facilities over the coming four years to fulfil the current and future demand in the education sector, Emirates REIT said in the statement.
Akoya is a prime residential development expected to house more than 44,000 residents when complete in 2018, providing a large and immediate catchment area for the planned school.
Sylvain Vieujot, executive deputy chairman of Emirates REIT Management (Private) Limited, said: “This is our second transaction in the education sector and we are delighted to partner with Jebel Ali School, one of Dubai’s most respected schools.
"This is a unique opportunity in an exciting and upcoming area of the city and we recognise the long term strength of the sector and its importance to the overall economy. The transaction will enhance rental income from day one and provide long term secure cash flows.”