Dubai Holding eyes IPO of residential REIT on DFM: State-owned investment conglomerate Dubai Holding is looking to list 12.5% of its Dubai Residential REIT on the DFM in what would be Dubai’s first IPO of the year, according to the prospectus (pdf). The vehicle is set to be the first pure-play residential leasing REIT to list in the GCC and the largest by assets.

Dubai Holding is seeking up to USD 500 mn from the offering, sources told Reuters. The listing would be the first in Dubai this year, and the second in the UAE, following Alpha Data’s AED 600 mn IPO in February. It’s also the first to take place since volatility hit global markets following the US’ introduction of sweeping tariffs last month. ADQ-backed Etihad Airways had pushed its highly anticipated IPO to after Eid Al Fitr, but we haven’t heard anything yet, while Dubizzle and Property Finder are gauging investor appetite ahead of potential listings.

About the fund: The AED 1.3 bn REIT manages some 35.7k residential units across 21 communities with a gross asset value of AED 21.6 bn. It’s a closed-ended, income-generating real estate investment fund, with assets last year reaching an occupancy level of 97%.

A two-tranche offering: Some 1.63 bn REIT units will be up for grabs in an offering open to both retail and institutional investors, with Dubai Holding Asset Management (DHAM) — a wholly owned subsidiary of Dubai Holding — raking in all of the proceeds from the secondary unit sale. The institutional tranche of the offering (90%) is Reg S compliant making it easier for foreign institutions to buy in, while retail investors will be allocated the remaining 10%.

Books open next week: The subscription period will run from 13-20 May, during which each institutional investor can book orders without limits, while retail buyers must commit to at least 2k units each. The final offer price will be announced on Wednesday, 21 May, along with the allocation of units. The Dubai Residential REIT will ring the bell on the DFM on Wednesday, 28 May.

A sweetener for investors: The REIT is targeting semi-annual dividend payouts starting September of this year, with its first two distributions expected to total at least AED 1.1 bn or 80% of its FY 2025 profit — whichever is higher. The REIT intends to maintain the 80% payout threshold in future years.

The timing is strategic: “The REIT...is actually a defensive investment vehicle,” CEO of Dubai Holding Asset Management Malek Al Malek said at a media briefing. “So with this volatility, investors usually look for some of these very clear government stories that can yield outcomes," Malek said.

A snapshot of its financial performance: The Dubai Residential REIT’s net income dipped roughly 21.8% y-o-y to AED 2.64 bn in 2024. Its revenues were up 8.9% to AED 1.8 bn over the same period, according to the ITF document (pdf).

ADVISORS- Emirates NBD Capital, Morgan Stanley and Citigroup are quarterbacking the transaction as joint global coordinators, with Abu Dhabi Commercial Bank, Arqaam Capital and First Abu Dhabi Bank acting as joint bookrunners on the transaction. Deloitte & Touche is auditor, while Ibrahim & Partners is legal counsel. Receiving agents include Emirates NBD Bank, Mashreq Bank, First Abu Dhabi Bank, and Emirates Islamic Bank, among others.cu

ALSO IN THE PIPELINE- Dubai Holding is said to be mulling a second IPO for a portfolio of commercial real estate assets, including malls, hotels, and theme parks.

The story also got ink from Bloomberg.

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