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Mon 11 May 2020 02:15 PM

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Emirates REIT seeking legal action over 'abusive market practices'

Company alleges it has been target of 'aggressive campaign' of 'false rumours'

Emirates REIT seeking legal action over 'abusive market practices'

Sylvain Vieujot, the chief executive officer of Equitativa, the manager of Emirates REIT. Image: ITP Media Group

Dubai-based sharia-compliant real estate investment trust, Emirates REIT, has said it has discovered evidence of “abusive market practices” by certain market participants and has reported these to the regulatory authorities.

In an email to shareholders and holders of its sukuk, or Islamic bonds, it said a downturn in the United Arab Emirates’ real estate sector and resulting investor sentiment, combined with the onset of the coronavirus outbreak, had contributed to its low share price.

However, it added: “Despite the difficult market conditions, we have been increasingly concerned that our share price is trading at unusually low levels, compared with the rest of the REIT market, and that it has experienced unusual price movements.”

The email was sent by Sylvain Vieujot, the chief executive officer of Equitativa, the manager of Emirates REIT.

According to news agency Reuters, the shares were trading at $0.2 a share on Sunday compared with a net asset value (NAV) per share of $1.57 at the end of 2019.

The email added that, “in order to protect our shareholders from the abusive actions of these individual traders, the REIT has sought legal advice and will be taking whatever steps it can to prevent further abusive market practices, and to hold those responsible to account”.

Emirates REIT said its current market capitalisation of $60 million was not reflective of the company’s true value, saying it holds $44m in cash.

It also highlighted knowledge of “several parties” targeting Emirates REIT and Equitativa “through an aggressive campaign of false rumours conducted both online and offline”.

“We believe this campaign is seeking to undermine investor confidence and negatively influence the REIT share value, which could have damaging consequences for our shareholders and Sukuk holders,” it said.

The company said it would move to reporting its revenues and NAV quarterly due to the continued market volatility and “for consistency”.

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