Dubai’s stock exchange eyes $17 trillion private credit market
Dubai’s stock exchange is dipping its toes into the $1.7 trillion private credit market with a new platform it says would make it easier for local companies to raise such debt.
Dubai Financial Market will also allow venture capital firms to sell the shares of private companies they own on the new platform, which will be known as Arena, according to a statement. Arena will operate on technology provided by Nasdaq Inc.
Middle East sovereign wealth funds from Mubadala Investment Co. to Abu Dhabi Investment Authority have joined investors around the world in piling into the burgeoning market for private credit.
Still, the United Arab Emirates has largely remained a market that’s dominated by bank loans.
With Dubai Financial Market’s latest offering, that could soon change, according to the exchange’s Chief Executive Officer Hamed Ali.
“It enables investors to easily access private investments in the UAE’s most promising companies and brands,” Ali said in the statement.
An Abu Dhabi investment firm and a Saudi conglomerate have bought into the largest office tower in Dubai’s financial hub, securing a slice of one of the world’s few upbeat commercial property markets.
The $105 billion fund Lunate and Saudi Arabia’s Olayan Financing Company have bought a 49 percent stake in ICD Brookfield Place in one of the largest commercial real estate transactions since the start of the pandemic, according to a statement.
Financial details weren’t disclosed, though Bloomberg has previously reported the tower could be worth as much as $1.5 billion.
ICD Brookfield Place has become “the most coveted address in Dubai for businesses and leisure alike,” Khalid Al Bakhit, chairman of the development, said in the statement. “This transaction underscores the trust and confidence in this incredible development and in the innovation in Dubai’s real estate.”
ICD Brookfield Place towers more than 900 feet (283 meters) over Dubai’s financial free-zone, and includes roughly a million square feet of office space, a members’ only club, a gym, supermarket and several restaurants. The building, which commands premium rents, is over 98 percent occupied and Brookfield will continue to manage the property after the deal closes.
Upon completion of the deal, ICD and Brookfield are set to retain a combined 51 percent equity interest in the tower that will be split equally between the two sides.
The sale comes amid a boom in Dubai’s commercial real estate market, which has become among the best-performing worldwide. That’s due to an influx of high-profile firms drawn by Dubai’s proximity to deep-pocketed funds, ease of doing business, light tax regime and a favorable time zone.
“This investment is a testament to the continued demand for premier office properties like ICD Brookfield Place and underscores the fact that capital continues to seek high-quality real estate globally,” Jad Ellawn, managing partner and regional head of the Middle East for Brookfield, said in the statement.
ICD Brookfield Place has seen rents soar since it opened in the middle of the pandemic in 2020. That’s in stark contrast to similar properties in London and New York, where rising interest rates and slower return to the office have hurt occupancy.
Brookfield Asset Management and state-owned Investment Corp. of Dubai put up the tower for sale last year and initially attracted interest from Asian and regional buyers. Many of the world’s top banks and law firms including JPMorgan & Chase Co. and Freshfields Bruckhaus Deringer have their regional headquarters in the tower.