Dubai Holding announced today that it increased the offering size of the Dubai Residential REIT IPO to 15 percent of the REIT’s issued unit capital instead of the previously announced 12.5 percent. The increase came following approval from the UAE Securities and Commodities Authority.
Based on the unchanged offer price range of AED1.07 to AED1.10 per offer unit, the revised offering size is expected to be between $568 million and $584 million, implying a market capitalization at listing of between $3.8 billion and $3.9 billion.
Institutional offering increased
As previously announced, Dubai Residential REIT’s IPO consists of two tranches. The first tranche, the UAE retail offer, remained unchanged at 162,500,000 units, and is open to retail investors and eligible entities holding a National Investor Number (NIN) with the DFM.
The second tranche, the institutional offering, increased from 1,462,500,000 units to 1,787,500,000 units, and is open to qualified institutional investors outside the United States under Regulation S, subject to applicable UAE laws and SCA approval.
Investors in both tranches can subscribe to the offering, which opened on May 13 and will close on May 20. The final offer price will be determined through a book-building process conducted in consultation with the joint global coordinators, the fund manager and the selling unitholder, and is expected to be announced on May 21.
Dubai Holding added that the completion of the offering and admission of units to trading on the DFM is expected to take place on or around May 28. The Dubai Residential REIT units are expected to trade under the symbol “DUBAIRESI”.
Read: Dubai gold price rises as soft dollar, tariff threats boost safe-haven demand
Semi-annual dividend policy
Dubai Residential REIT seeks to adopt a semi-annual dividend distribution policy, making payments in April and September of each year, starting from September 2025. The REIT expects that the sum of its first two dividend payments, expected to be made in September 2025 and April 2026, will be the higher of AED1,100 million and an amount equal to 80 percent of profit.
For 2026 and thereafter, Dubai Residential REIT intends to distribute at least 80 percent of its profit. The offer price range implies a gross dividend yield of 7.9 percent at the bottom of the price range and 7.7 percent at the top of the price range for the year ending December 31, 2025.
The company also revealed that the selling unitholder will allocate proceeds from the sale of up to 243,750,000 offer units to xCube LLC, a DFM-authorized price stabilization manager appointed by the fund manager.
