Emirates REIT Agrees Re-financing of Existing Sukuk
With an aim to optimize the company's capital structure, reduce financing costs, and strengthen its financial position.
Emirates REIT, one of the largest Shariah-compliant real estate investment trusts globally, has reached an agreement to fully refinance its existing Sukuk, which was originally due in December 2025. The refinancing will involve the issuance of a new $205 million Sukuk with a maturity date in December 2028. The new Sukuk has received a BB+ rating from Fitch.
Profit Rate Structure
The newly issued Sukuk will feature a profit rate of 7.5% during the first three years. Starting in the fourth year, the profit rate will increase to 8.25%, reflecting the terms of the refinancing arrangement.
Closing Conditions
The final issuance of the new Sukuk is still subject to the completion of customary closing conditions. Once these conditions are met, the refinancing deal will proceed.
Role of HSBC and Legal Advisors
HSBC has acted as the lead arranger for the refinancing deal, with support from its Private Credit and Debt Capital Markets teams. Legal counsel for Emirates REIT was provided by Latham & Watkins, while White & Case represented HSBC Bank plc in the transaction.
Thierry Delvaux, CEO of Equitativa (Dubai) Ltd, the REIT Manager, commented: “Over the past year, Emirates REIT has reduced its outstanding financings by over U.S.$190 million, bringing its Financing to Value ratio below 26%. This, combined with its strong operating results, allowed the REIT to obtain our target rating for the new Sukuk of BB+. The positive reaction from both domestic and international investors to the new Sukuk issuance is a clear testament to the quality of the REIT’s assets, and the REIT manager’s strategy. With the refinancing now firmly in place, our efforts will focus on capitalizing on Dubai's dynamic growth to create shareholder value.”
Strong Financial Position
The favourable terms of the new financing reflect Emirates REIT’s solid credit profile, robust cash flow generation, and strong operational performance. These factors contributed to the BB+ credit rating assigned to the REIT.
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