DEAL: MENA region’s first Reit sukuk

Author: Amélie Labbé | Published: 9 Jan 2018

Emirates REIT has issued the first sukuk by a real estate investment trust (Reit) in the MENA region.

It’s also the first Reit from the region to have a credit rating (BB+).

Reits have not traditionally issued sharia-compliant bonds, and have instead preferred to tap conventional debt markets for their financing needs. The only previous issuance of this type was in Malaysia in 2014, when KLCC Reit sold $930 million of Islamic bonds.

The Irish Stock Exchange (ISE) hosted the $400 million issuance, which relied on underlying wakala and murabaha contracts. The entire timeline of the deal was less than two months. This was to ensure Emirates Reit didn’t miss the favourable issuance window, at the end of Q4, according to Ahmed Taha, director of debt capital markets at Standard Chartered Bank, which acted as sole global coordinator, ratings advisor and joint lead manager.

The hybrid structure included...