By Sarah Townsend
REIT to fund build of British Columbia Canadian School in Dubai Investments Park
Real estate investment trust Emirates REIT said on Wednesday it had acquired the leasehold on land in Dubai Investments Park and intends to fund the development of a new school at a total investment cost of AED88 million ($23.9 million).
The school will be the third in Emirates REIT’s portfolio and brings the trust’s investments in the education sector to AED709 million ($193 million) – 25.5 percent of its total portfolio.
The REIT said it had acquired the 25,000 square metre plot of land from the British Columbia Canadian School and agreed a 28-year lease with the school in a sale-and-leaseback arrangement.
The deal will provide an initial net income of 12 percent of the total development costs within the first year, Emirates REIT said, adding that it had entered into an Istisna (Islamic finance) agreement to fund the school’s construction in two phases.
The development is to include a foundation, primary and secondary school, as well as a sports centre and auditorium covering a total built up area of 17,156 sq m.
Emirates REIT CEO Sylvain Vieujot said: “This is Emirates REIT’s third school transaction and we are delighted to partner with the British Columbia Canadian School.
“We continue to believe in the strategic importance of the education sector in the UAE, and this new school will be a new landmark in a fast-growing area of Dubai.
“For shareholders of the REIT, the transaction will immediately increase rental income, offer substantial valuation upside and provide secure cash flows in the long term.”
The British Columbia Canadian School’s network comprises 45 schools in eight different countries.
Emirates REIT said the catchment area for the new Dubai school will come from adjacent residential developments including the Green Community, Jumeirah Golf Estates, International Media Production Zone, Dubai Sports City, Discovery Gardens, Jumeirah Village Circle and Jebel Ali Village.
Last year, the REIT announced it would fund the development of a new school in Damac Properties’ Akoya project, to be operated by Jebel Ali School for a 26-year term.