The Emirate REIT, a Dubai-based sharia-compliant real estate investment trust, is considering de-listing from Nasdaq Dubai.
The Board of Emirates REIT, and on its behalf Equitativa acting as the REIT Manager of Emirates REIT, said in a statement that it has decided to launch of a comprehensive review of strategic options for the REIT, including a potential de-listing from Nasdaq Dubai.
The company also responded on it website on the same day to a Dubai Financial Services Authority (DFSA) investigation into matters connected to the management of Emirates REIT. The trust's manager Equitativa said that intends to co-operate with the DFSA investigation which is understood to relate specifically to valuation, information and interests and corporate governance.
The DFSA confirmed it was investigating Equitativa with respect to its role as fund manager of Emirates REIT. It said the probe had started on May 24 but did not disclose details of the investigation.
De-listingThe decision to consider de-listing is based mid a downturn in the United Arab Emirates' (UAE) real estate sector and weak equity market conditions.
"It is looking likely that a return to operating as a private Reit, at least temporarily, is in the best interests of the fund and its investors," the company said in a statement.
It said that current market conditions in UAE public equity markets had damaged the share's performance and led to an "unjustifiably large gap between the fund's share price and its true value".
The real estate sector in Dubai, has been difficult for investors due to an oversupply of homes coupled with weak economic growth, a problem now made worse by the ongoing covid-19 crisis.
The Emirates Reit has a market capitalisation of around US$45 million. It added "a cyclical downturn in the UAE real estate sector and a challenging operating environment" had contributed to its decision to review its options, including a potential de-listing.
Emirates Reit's shares were trading at $0.15 on Sunday compared with a net asset value (NAV) per share of $1.57 at the end of 2019.