Emirates REIT has acquired the interest on a 25,000 sqm leasehold land plot and will fund the development of a new AED 88mn ($24mn) school in Dubai Investments Park.
The Shari’a compliant real estate investment trust acquired the interest from the British Columbia Canadian School and immediately leased back the property to the school operator for a 28-year lease term, providing an initial net income of 12% of the total development costs within the first year.
Simultaneously, the REIT entered into an agreement to fund the construction of new educational facilities in two phases, including a foundation, primary and secondary school, as well as a sports centre and an auditorium. The school will be constructed to the operators specifications over a built up area of 17,156 sqm.
Sylvain Vieujot, Chief Executive Officer of Emirates REIT Management (Private) Limited, said: This is Emirates REITs third school transaction and we are delighted to partner with the British Columbia Canadian School.
We continue to believe in the strategic importance of the education sector in the United Arab Emirates, and this new school will be a new landmark in a fast-growing area of Dubai. For shareholders of the REIT, the transaction will immediately increase rental income, offer substantial valuation upside and provide secure cash flows in the long term.
The British Columbia Canadian School of Dubai is part of an established international education program, supervised and certified by the Government of British Columbia in Canada. It comprises 45 schools in eight different countries and will be operated by an experienced team that already owns and operates the British Columbia Canadian International School of Cairo, in Egypt.
The catchment area for the British Columbia Canadian School will come from adjacent major residential developments including the Green Community, Jumeirah Golf Estates, International Media Production Zone, Dubai Sports City, Discovery Gardens, Jumeirah Village Circle and Jebel Ali Village.