ENBD REIT announces calling on the corporate guarantee of its student accommodation tenant, Uninest, in respect of rent due.
Dubai, United Arab Emirates, 27 October 2020: ENBD REIT (CEIC) PLC (“ENBD REIT” or the “Fund”), the Shari’a compliant real estate investment trust managed by Emirates NBD Asset Management, is required by DFSA Market Rule 6.5 to make the following market disclosure.
ENBD REIT has announced that it will be calling on the rental guarantee relating to its student accommodation tenant, Uninest Real Estate Leasing and Management Services LLC (“Uninest”), in respect of rent for the months of July, August, September and October this year. At the date of acquisition in 2017, Uninest entered into a 7-year lease with ENBD REIT for its purpose built student accommodation building located in Dubailand Residence Complex as the sole occupant and operator of the building, and at the same time provided a rental guarantee by an associated company, CVG Advantage Europe Ltd. Both entities are subsidiaries of the Global Student Accommodation (“GSA”) group of companies.
Under the terms of the guarantee agreement, the guarantee provides for the guarantor to settle overdue payments within five (5) days of receipt of written notice. Despite best efforts to offer rental relief in light of the Covid-19 pandemic, ENBD REIT has been unable to reach a suitable compromise with Uninest in respect of rent due and has provided written notice to CVG Advantage Europe Ltd requesting payment by the guarantor on 12th October 2020. Uninest’s guarantor, CVG Advantage Europe Ltd, is registered in Jersey where local law allows fourteen (14) days for remediation before formal proceedings may commence. On 26th October 2020, the fourteen day period passed, and ENBD REIT will initiate the necessary proceedings against the guarantor, to recover overdue rental payments.
The Uninest property accounts for 7% of ENBD REIT’s total property portfolio value and 7.5% of the portfolio’s previous year’s gross revenue as at 30th June 2020. The REIT’s management are committed to safeguarding the integrity of the portfolio and the consistency of rental income from its assets, in the interest of delivering returns to shareholders. The REIT management and Board are sympathetic to disruption to all business that has been caused by the Covid-19 pandemic and have successfully negotiated rent relief to numerous tenants across the portfolio. ENBD REIT will maintain its attempts to work with Uninest and its guarantor to find an acceptable outcome for both parties.