The Tecom Group, renowned for developing strategic business districts in Dubai, has approved its ‘Strategic Acquisition and Development Plan’ by the board.
This ambitious plan, valued at AED 1.7B, aims to drive sustainable growth and innovation in Dubai’s commercial real estate sector.
As part of the initiative, Tecom will invest AED 966M to acquire commercial and industrial assets from Dubai Holding Asset Management (DHAM), strengthening its portfolio and presence across vital sectors in Dubai.
An additional AED 689M will be allocated to construct grade A offices in Dubai Design District.
Abdulla Belhoul, CEO of Tecom Group, expresses optimism about the plan, stating, “Tecom Group is well-positioned to seize the unique opportunities presented by Dubai’s commercial real estate market. This plan isn’t just about expanding our assets; it’s a strategic move to leverage market dynamics and drive our vision.”
He adds, “With sound financial management, an optimized capital structure, and strong financial performance this year, we’re equipped to execute these deals while maintaining financial health. We eagerly anticipate updating the market as we pursue our growth agenda.”
Tecom Investment plans to acquire two grade A office buildings in Dubai Internet City from DHAM, valued at AED 420M. These buildings, with a gross leasable area of 334,000 square feet, host leading regional and international tech firms.
Dubai Industrial City will acquire several strategically located industrial land plots, totaling 13.9M square feet, from DHAM for AED 410M to meet the rising demand for industrial assets in Dubai.
Meanwhile, Dubai Design District intends to acquire 629,000 square feet within the “Design Quarter” from DHAM for AED 136M. Additionally, it will develop six grade A office buildings in d3 to cater to growing demand from design, fashion, and creative sectors.”
Factors to Promote Future Growth
Factors such as robust occupier demand in Dubai’s office market and high occupancy rates in Tecom Group’s business districts are expected to support future growth.
The planned acquisitions are forecasted to have a positive impact on the group’s financial performance.
Tecom Group is well-financed for these transactions, with ample liquidity and the ability to tap into existing revolving credit facilities.
In Q1 2024, the group reported a 10% year-on-year increase in revenue to AED 564M, driven by a record-high portfolio occupancy rate of 91%. Earnings before interest, taxes, depreciation, and amortization (EBITDA) rose 10% year-on-year to AED 439M, with a margin of 78%, reflecting the group’s focus on operational optimization. The customer base surpassed 11,000, attributed to strong customer retention and the addition of new customers across the business.
