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29 March 2024

Emirates Reit acquires 15 office floors in Index Tower

Sylvain Vieujot, Executive Deputy Chairman of Emirates REIT Management and Ali Al Kaitoob, CEO of Emirates NBD Properties. (Supplied)

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By Staff

Emirates Reit Limited, the UAE’s first regulated Shariah-compliant real estate investment trust incorporated in the Dubai International Financial Centre (DIFC) and listed on NASDAQ Dubai, said on Monday it has entered into an agreement with Emirates NBD Properties to acquire 15 office floors and 706 car parking spaces in the DIFC’s Index Tower, for a cash of Dh613.5million, excluding transfer fees.

The office floors, are located between level 4 and level 25 of the tower, and comprise approximately 372,000 square feet of commercial space. Once fully tenanted, the acquisition price of Dh1,650 per square feet should result in a gross yield in excess of 10 per cent based on current DIFC rental values.

Following this strategic transaction, Emirates Reit will own 16.64 office floors in Index Tower or two thirds of the building’s office floor space as well as 1,404 car parking spaces. In addition, the Reit already owns the retail mall located over ground and podium levels as well as the sky lobby. Emirates Reit will begin leasing the office floors straight away and is now in a position to move forward with the reconfiguration of the retail space.

The office floors being acquired are currently vacant, having not previously been offered for lease. Emirates Reit believes there is significant demand from commercial tenants for such prime office space. Index Tower offers both sizeable floor plates for single tenants and an opportunity for subdivided space for smaller tenants at a premium.

Sylvain Vieujot, Executive Deputy Chairman of Emirates Reit Management (Private) Limited, said: “This is our largest acquisition to date. It demonstrates that there are fantastic opportunities within the Dubai market to invest at attractive prices in prime buildings, which offer significant growth. The Index Tower has the potential to attract high profile long-term commercial tenants, offering both an iconic address and flexible space options. Emirates Reit is now in a very good strategic position, controlling the offices, the retail and the car park of this prime Dubai landmark.”

Ali Al Kaitoob, CEO of Emirates NBD Properties, said: “We are very pleased to once again work with Emirates Reit on this landmark agreement. This reflects Emirates NBD Properties relentless efforts in the real estate market which have made it possible to conclude this strategic transaction”.