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Emirates REIT is building a Dh208.3 million school in Dubai’s Akoya by Damac development, which will be leased to the Jebel Ali School.
The company said it acquired a 358,453-square-foot (33,301 square metres) plot of land for Dh98.5 million from Damac Crescent Enterprises on Sunday, according to an emailed statement on Monday.
The land has been leased back to the Jebel Ali School, which will provide the sharia-compliant Real Estate Investment Trust with an initial net income in excess of 10 per cent of the acquisition cost.
Emirates REIT will build the school at a cost of Dh109.8 million. The school will be leased to the Jebel Ali School under a 26-year leasing agreement.
“This is a unique opportunity in an exciting and upcoming area of the city and we recognise the long term strength of the sector and its importance to the overall economy. The transaction will enhance rental income from day one and provide long term secure cash flows,” stated Sylvain Vieujot, Executive Deputy Chairman of Emirates REIT Management (Private) Limited.
The development will be built over 20,800 square metres and include a foundation, primary and secondary school and a sports centre and auditorium.
The company said the internal rate of return is expected to be more than 11 per cent and will account for an immediate valuation gain of Dh6 million.
Once completed the school will account for 9.2 per cent of Emirates REIT’s current portfolio, which is valued at Dh2.25 billion.
The schools catchment area, along with Akoya residents, will be Arabian Ranches, Mudon, Motor City, Sports City, the Green Community and IMPZ.
Source: Staff Report, gulfnews.com