May 10, 2020 / 8:59 AM / 21 days ago

Dubai real estate fund says irregular trading dented share price

DUBAI, May 10 (Reuters) - Emirates REIT, a Dubai-based sharia-compliant real estate investment trust, said on Sunday it had found evidence of irregular trading activity that has contributed to its low share price and has reported it to regulatory authorities.

The shares were trading at $0.2 a share on Sunday compared with a net asset value (NAV) per share of $1.57 at the end of 2019. Emirates REIT said its board was in the final stages of evaluating options to increase share liquidity and the trust value.

In an email to shareholders and holders of its sukuk, or Islamic bonds, it said a downturn in the United Arab Emirates’ real estate sector and resulting investor sentiment had contributed to its low share price.

The letter was sent by Sylvain Vieujot, the chief executive officer of Equitativa, the manager of Emirates REIT.

The company has been “increasingly concerned that our share price is trading at unusually low levels, compared with the rest of the REIT market, and that it has experienced unusual price movements”, it said.

“Our investigations have found evidence of irregular trading activity by certain market participants. In light of these potentially abusive market practices, we have reported those activities to the relevant regulatory authorities.”

Last month, sources told Reuters that Emirates REIT was considering buying back some of its roughly $400 million in outstanding sukuk to improve its balance sheet.

It was also considering refinancing the sukuk, but one source said talks with banks fell apart partly because of their exposure to troubled hospital operator NMC Health, which is in restructuring talks with lenders.

At the time Emirates REIT did not respond to a request for comment on this.

Without naming them, the company said in the letter that recent “corporate scandals” in the UAE had affected all listed companies and led to the company reaching its lowest level of ownership outside the Gulf Cooperation Council since its IPO.

Emirates REIT said its current market capitalisation of $60 million was not reflective of the company’s true value, saying it holds $44 million in cash.

It said it would move to reporting its revenues and NAV quarterly due to the continued market volatility and “for consistency”.

Reporting by Davide Barbuscia and Yousef Saba; Editing by Susan Fenton

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