The initial public offering of the Eskan Bank Realty Income Trust (REIT) has opened today. The BD 14.4 million offering represents 72.9% of the Trust’s total size of BD 19.8 million, and has a target of 6.5% in net distributable income payable semi-annually. This Sharia-compliant offering is reserved for Bahraini and GCC nationals and is open to individual and institutional applicants. Securities & Investment Company (SICO) is the mandated lead manager, while Bahrain Islamic Bank (BisB) has been appointed as the receiving bank. According to Eskan Bank's General Manager Dr. Khalid Abdulla, the REIT enables investors to share in a diversified portfolio of properties, namely Segaya Plaza and Danaat Al Madina, offering diversification within the real estate sector. The properties currently have an occupancy rate of over 85%, and the Trust intends to increase its Sharia-compliant property portfolio.
Bahrain’s Eskan Bank has enjoyed a very fruitful 2015. The bank recorded positive growth in its mortgage-loan portfolio and also made great strides in several of its social and affordable housing initiatives. Total net income grew by 8% during the year, while the bank’s capital-adequacy ratio continued to improve to 151.72%. Although the Ministry of Housing (MOH) is responsible for the allocation of social-housing financing to Bahraini citizens, Eskan Bank provides pivotal support through the processing of approved social-housing financing applications.
Eskan Bank has appointed Securities & Investment Company (SICO) as lead arranger for the first real estate investment trust (REIT) on the Bahrain Bourse. Eskan Bank 's REIT will consist of two income-generating and unleveraged properties currently owned by Bahrain Property Musharaka Trust (BPMT) which was formed in May 2011, in collaboration with reputable institutional investors and high net worth individuals. As arranger, SICO is responsible for managing the entire process. The Sharia-compliant REIT is expected to have a total value of BD20 million, with a tranche that will be offered to the public through the initial public offering (IPO) that is planned to take place later this year.
Eskan Bank (EB), established in 1979 and fully owned by the government, has the mandate to provide financing to the low-to-medium-income population segment, specifically to acquire (purchase/construct) a primary residence, and contribute to related property development. During its 36 years of existence, the bank has assisted approximately 35 percent of citizens by providing more than BD 700 million in mortgage financing. With its authorized share capital of BD 400 million and paid-up capital of BD 108.3 million, EB operates under a restricted conventional retail banking license issued and regulated by the Central Bank of Bahrain (CBB). Its total assets at the end of 2014 stood at BD 610.7 million.