Source: Arabian Business
Dubai has kicked off its first listing of the year with a bang! The Dubai Residential REIT IPO product generated significant demand from investors with total demand exceeding AED 56 billion! That is over 26x in oversubscription and suggests major investor confidence in Dubai’s growing real estate and financial markets.
As a result, units were priced at AED 1.10, reflecting a market value for Dubai Residential REIT of AED 14.3 billion. Notably, only 12.5% of the REIT’s units were offered to the public. Given robust demand, the offer size was increased to 15%, allowing the company to raise AED 2.14 billion and led to a market capitalization of over AED 14 billion. In practice, this gives a nice Proxy for how the Company was able to generate investor confidence and ultimately respond to market demand. “Reflecting the exceptionally strong demand, the final offer price was set at the top end of the price range, enabling the company to raise Dh2.14 billion through the IPO,” said a statement.
Dubai Residential REIT is supported by Dubai Holding Amit Kaushal, Group CEO of Dubai Holding, said “The significant demand is a powerful endorsement of Dubai Holding’s strategic vision and the strength of our residential leasing portfolio,”
Kaushal also said “This investor confidence speaks not only to the resilience of the UAE’s economic vision and Dubai’s long-term growth trajectory, but also highlights the increasing depth, maturity and global appeal of its capital markets”
“We are confident in the ability of Dubai Residential REIT to deliver sustainable, long-term performance – our focus remains firmly on shaping the future of urban living in Dubai and contributing to the city’s continued evolution as a global hub for investment, innovation and high-quality living.”
From a financial standpoint, the REIT achieved AED 1.8 billion in revenues last year and had an adjusted operating profit of AED 1.3 billion. More importantly, it has committed to a dividend of AED 1.1 billion for its 2025 fiscal year, resulting in a strong yield of 7.7%. This dividend yield makes the REIT an attractive investment for those looking for more consistent income.
Units of Dubai Residential REIT are expected to begin trading on the Dubai Financial Market on or around May 28th, 2025.
This IPO is significant for Dubai’s financial markets as it will broaden them and be indicative of Dubai’s standing as an investment destination globally. Since the REIT has a strong portfolio, strong established leadership, and a strong indication of investor interest, Dubai Residential REIT could show significance for Dubai’s growth going forward.
