Initial public offering (IPO) of the Eskan Bank Realty Income Trust (REIT) has opened on Monday for two weeks. The offer will close on December 6. The 14.4 million Bahraini dinar offering represents 72.9 per cent of the trust’s total size of 19.8 million Bahrani dinar, and has a target of 6.5 per cent in net distributable income payable semi-annually. This Sharia-compliant offering is open to Bahraini and GCC nationals, and is open to individual and institutional applicants.
Securities & Investment Company (SICO) is the mandated lead manager, and also the sub-investment manager and dedicated market maker. Bahrain Islamic Bank (BisB) has been appointed as the receiving bank.
Dr Khalid Abdulla, general manager of Eskan Bank, provided details of the initial two Bahraini properties comprising the REIT, which are wholly owned by the trust. He said, “The Eskan Bank REIT enables investors to share in a diversified portfolio of properties, namely Segaya Plaza and Danaat Al Madina, offering diversification within the real estate sector with primary exposure to retail, office and residential segments, thereby spreading the risk of owning individual properties. The properties currently have an occupancy rate of over 85 per cent, and the trust intends to increase its Sharia-compliant property portfolio as and when attractive opportunities arise”.
“While the occupancy rate continues to gain momentum, we have structured a performance supplement into the trust, enhancing its attractiveness to investors, and providing an intention by the investment manager to supplement the actual return of the trust should it be below 6 per cent as the occupancy increases,” he added.
Najla Al Shirawi, chief executive officer of SICO said, “The minimum subscription is 500 Bahrain dinar, and allotment priority will be given to individual Bahraini applicants and thereafter all other investor categories on a pro rata basis.
The trust intends to provide unit holders with steady, recurring distributions equating to a minimum of 90 per cent of net distributable income of the trust; and increased unit holder value through the potential appreciation in the price of units derived from improved property upkeep stemming from a reserve fund dedicated to the trust”. She continued, “Investors will have the flexibility to trade their units upon listing on the Bahrain bourse, with a dedicated market maker providing additional liquidity on an ongoing basis”.