ENBD REIT (CEIC) PLC (“ENBD REIT”), the Shari’a compliant real estate investment trust managed by Emirates NBD Asset Management Limited, has announced that it has completed its share buy-back programme, as part of its strategy to realise value for shareholders holding equity, which has been trading at a significant discount to the REIT’s asset valuations. The initiative has also achieved its objectives of preventing disproportionately negative movements in the share price resulting from small trades as well as providing additional liquidity.  

ENBD REIT allocated up to USD 3.5 million for the programme, to facilitate the acquisition of 4,401,340 shares at a price no higher than 10% of the previous day’s volume weighted average trading price (“VWAP”) and its previous six months’ VWAP as prescribed by the regulator. The programme was effective from 21st February 2019 until 30th September 2019 unless fully executed at an earlier date. The buy-back programme was placed on hold during ENBD REIT’s closed period, from 1st April 2019 until the announcement of its full year results. ENBD REIT conducted the programme in accordance with the terms of the general authority granted to the Board by shareholders at the Annual General Meeting on 3rd June 2018, and relevant approvals obtained from the regulator.

Anthony Taylor, Head of Real Estate at Emirates NBD Asset Management, said:

“The rationale for implementing the buy-back was to realise value for shareholders by repurchasing shares that were trading at a significant discount to the market valuations of our underlying assets. Other benefits of the programme included improved liquidity for our stock and preventing disproportionate movements in the share price, which had been caused by small trades prior to the programme commencing. The buy-back did not result in an improved share price, which continues to be affected by soft real estate and equity market conditions, but we are pleased with its overall outcome and may look to continue it in the future.”

ENBD REIT’s management and directors identified value in utilising excess cash held within the REIT to purchase and subsequently cancel shares, with the aim of achieving higher returns and projected dividend yields for investors in the future. The buy-back programme was limited to the extent that it did not impact ENBD REIT’s ability to pay dividends and acquire further assets, in line with its strategy to grow and diversify its real estate holdings.

Shares acquired during the programme have been cancelled within the regulatory timeline. SHUAA Securities LLC (previously Integrated Securities LLC) were appointed as independent brokers to execute the programme on behalf of ENBD REIT, via the Order Book of Nasdaq Dubai. ENBD REIT’s Board of Directors did not participate in the share buy-back programme.

Source: Instinctif partners