Driven by strong demand from domestic and international investors and oversubscription across all tranches, Dubai Holding is increasing the offer size of the initial public offering (IPO) of Dubai Residential REIT – representing 15 per cent (1,950,000,000 shares) of its issued share capital. The previously announced public float was for 12.5 per cent (1,625,000,000 shares).
The company, through its wholly owned subsidiary DHAM REIT Management, has secured the necessary approvals from the UAE Securities and Commodities Authority (SCA).
Dubai REIT IPO expanded
Dubai Residential REIT’s offering consists of two tranches. The First Tranche, for the UAE retail investors, remains unchanged at 162,500,000 units. The Second Tranche, open to qualified institutional investors, is being increased from 1,462,500,000 units to 1,787,500,000 units.
The IPO opened on 13 May, and will close on Tuesday, 20 May as per the original plan. The final Offer Price will be determined through a book-building process and is expected to be announced on Wednesday, 21 May.
The Offer Price Range remains unchanged, between AED 1.07 and AED 1.10 per share. The revised size is expected to be between AED2,087 million (US$568 million) and AED2,145 million (US$584 million). This will imply a market capitalisation for Dubai Residential REIT between AED13.9 billion (US$3.8 billion) and AED14.3 billion (US$3.9 billion) at the time of listing.
Dividend policy
Dubai Residential REIT intends to adopt a semi-annual dividend distribution policy, making payments in April and September of each year, starting from September this year.
Subject to the Board’s approval, REIT expects the dividend payments will be higher than AED1,100 million, or an amount equal to 80 per cent of profit for the period before changes in fair value of investment property, in respect of its financial results for the year ending 31 December 2025.
For the financial results for the year ending 31 December 2026 and thereafter, Dubai Residential REIT intends to distribute at least 80 per cent of profit for the period before changes in fair value of investment property for each accounting period, subject to Board approval.
The Offer Price Range implies a gross dividend yield of 7.9 per cent at the bottom of the price range and 7.7 per cent at the top of the price range for the year ending 31 December 2025.
Dubai Residential REIT is a Shariah-compliant income-generating closed-ended real estate investment fund and one of the largest owners and operators of residential real estate in the emirate. Upon listing on the Dubai Financial Market (DFM), DHAM Investments, a subsidiary of Dubai Holding, will continue to own a majority 85 per cent stake in the company.
Dubai Residential manages one of the city’s most diverse portfolios as part of Dubai Holding Asset Management – from the premium residences at Bluewaters and City Walk to the family-focused communities of The Gardens, Garden View Villas, Remraam, Layan, Shorooq, and Nad Al Sheba Villas. Its 21 communities comprise over 35,000 homes.
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