Eskan Bank to launch REIT

Manama : Eskan Bank yesterday finalised the formal registration of its real estate investment trust (REIT) with the Central Bank of Bahrain (CBB), which will be open for subscription starting November 22. 

“The REIT has a target distributable yield of 6.5 per cent net of all costs, and a minimum subscription of BD500, which should make it accessible and attractive to individual Bahraini and GCC nationals seeking a safe investment opportunity in the Kingdom’s real estate sector,” said Dr. Khalid Abdulla, General Manager of Eskan Bank.

“In readiness for this landmark event, we have appointed Bahrain Islamic Bank (BisB) as the official receiving bank for the subscription offering,” he added. 

The subscription is open to retail investors, as well as the sub-investment managers and dedicated market makers for a period of two-week only, with the closing date being 6 December, the company said in a statement. 

Securities & Investment Company (SICO) is the mandated Lead Manager for the public offering and listing of Bahrain’s first Sharia-compliant real estate investment trust (REIT). It will be listed on the Bahrain Bourse (BHB). 

Commenting on the move, SICO’s Chief Executive Officer Najla Al Shirawi: “The two income-generating properties that comprise the REIT – Segaya Plaza and Danaat Al Madina – currently have an overall occupancy rate exceeding 85 per cent. This is expected to increase in the near future, given that the commercial assets of the Danaat Al Madina property were only handed over last year.” 

Meanwhile, Eskan Bank’s Chief Business Officer & Deputy General Manager, Ahmad Tayara, re-affirmed the bank’s intention to expand and diversify the REIT in the
future. 

Wissam Haddad, Head of Corporate Finance at SICO, pointed out: “In comparison, US equity REITs have an average yield of 3.7pc (even with 30pc of average debt on their properties); while local equities are currently distributing an average annual yield of 4.4pc.”