Listing of Etihad REIT ‘postponed until next year’

Sharia-compliant real estate investment trust contains US$700 million of mixed-use assets to date

Reits generally offer investment in commercial real estate. Satish Kumar / The National

The planned flotation of Abu Dhabi Financial Group (ADFG)’s new real estate investment trust (Reit) has been postponed to the first half of 2018 from this year, pending regulatory processes, one of its key advisors said.

ADFG, an alternative investment company with US$5 billion in assets, said in April it planned to float the sharia-compliant Etihad Reit by the end of this year.

The company said in a statement that it had set up the Reit with a seed portfolio of 10 properties, with Abu Dhabi-based property developer Eshraq Properties as one of its founding shareholders.

However, Fawad Tariq Khan, general manager of Dubai-listed investment bank Shuaa Capital, which is advising ADFG on Etihad Reit, said the listing had been delayed.

"We are now looking at the first half of 2018 for the flotation while we go through regulatory processes with exchanges," Mr Khan said in an interview with The National.

Etihad Reit would be the first Reit domiciled in the Abu Dhabi Global Market (ADGM) financial free zone to list in the UAE, but regulatory processes with exchanges were taking longer than expected, he said.

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The Reit, which contains $700m of income-producing assets, is “fully functioning and already yielding dividends”, Mr Khan said.

An established vehicle in the US, Europe and Asia, Reits are a type of publicly listed fund that typically own income-producing commercial real estate and are legally obliged to distribute a proportion of their income, usually 80 or 90 percent, as dividends to shareholders.

The investment instruments are gaining popularity in the Gulf as investors seek more liquid real estate assets than standalone buildings. The largest Reit in the UAE, Emirates Reit, which is owned by Dubai-based fund manager Equitativa, has more than $1bn of real estate assets under management.

Etihad Reit is a mixed-use portfolio, ADFG said, whose initial 10 properties are located across the UAE and have an average occupancy level of over 90 percent.