Today's Edition
A.SREENIVASA REDDY (ABU DHABI)
Dubai Residential REIT, the GCC’s first pure-play residential leasing-focused REIT, has launched its initial public offering (IPO) on the Dubai Financial Market (DFM), offering 1.625 billion units, or 12.5% of its issued unit capital.
The subscription period runs from May 13 to 20, with trading expected to begin on or around May 28.
The IPO is divided into two tranches. The first tranche is allocated to retail investors in the UAE and comprises 10% of the total offer—162.5 million units. Each successful retail investor is guaranteed a minimum allocation of 2,000 units. The second tranche, comprising 90% or 1.4625 billion units, is earmarked for qualified institutional investors.
With a gross asset value (GAV) of Dh21.63 billion and a portfolio of 35,700 residential units across 21 communities, the REIT is set to become the largest listed REIT in the GCC. It caters to all housing segments—premium, community, affordable and corporate—with a tenant mix of 57% individuals and 43% corporates. Occupancy reached 97% in 2024.
Malek Al Malek, Chairman of the REIT’s Investment Committee, said the IPO gives investors a chance to participate in a resilient, income-generating platform backed by Dubai Holding’s broader real estate ecosystem.
Dubai Residential REIT is owned by DHAM Investments, which will remain the majority unitholder post-IPO. DHAM Investments LLC is owned by DHAM LLC, which is a subsidiary of Dubai Holding.
Unlike conventional equity offerings, the REIT is issuing units rather than shares, as it is structured as a Shariah-compliant, closed-ended trust. The offering has received Shariah compliance approvals from both the REIT’s internal committee and Emirates NBD Bank.
REITs differ from corporations typically listed on stock exchanges. “REITs focus on owning or financing income-generating real estate, distributing at least 80–90% of taxable income as dividends, unlike traditional companies that produce goods or services,” said Samer Mardini, Chief Investment Officer at Yorklyn Asset Management. “They benefit from a pass-through tax structure, avoiding corporate taxes if compliant, and tend to be less volatile as they are closely tied to real estate markets.”
REITs issue units rather than shares because they are structured as trusts, not corporations. “Units represent ownership in the trust’s real estate assets and income — particularly in Shariah-compliant cases like Dubai Residential REIT,” Mardini explained.
There are also specific regulatory requirements governing REITs. “These trusts are required to distribute at least 80% of their net income as dividends and must provide regular asset valuations and disclosures,” he added. “Such restrictions are designed to ensure income focus and transparency, though they may limit growth capital.”
