Dubai: The fund manager of Emirates REIT is raising Dh 40 million from the sale of half of an office floor in its flagship property, the Index Tower at DIFC. The shell-and-core space is priced at Dh3,350 per square foot.
The proceeds of the sale will be very useful for Equitativa, the fund manager, as it seeks to recover the Emirates REIT from a loss of Dh 897 million it suffered in 2020. Market watchers have spoken of more selective divestments of assets, which include education and health and industrial facilities.
Upon completion of the office divestiture, the real estate fund remains the main owner within Index Tower with 79% of the office floors.
Through the new sale, the occupancy of the Index Tower stands at 59% and up from 50% at the end of 2020. Since the beginning of this year, more than 24,700 square feet of the office area of the Tower, mainly as fully equipped and furnished premium offices from 120 to 290 sqm.
The sale “demonstrates a steady return of investor confidence in Dubai’s real estate market in the post-COVID-19 environment, and particularly in high-quality, premium real estate,” said Sylvain Vieujot, president of Equitativa’s group. “We believe the REIT is increasingly well positioned to implement its turnaround strategy and offer the many opportunities in its portfolio.”
Go back to the drawing board
Emirates REIT and Equitativa have been in the spotlight for the past two weeks on a plan to make some changes to its 2017 $ 400 million debt offering. The plan was abandoned after encountering strong opposition from an influential group of investors in Sukuk.
At the time, Equitativa said it will continue to make alternative plans to return to profitability and long-term growth.