But some investors, including Dubai-based Shuaa Capital are not happy and say the company’s claim that sukuk holders will benefit from the exchange was just “lip service” DUBAI: A proposal by Emirates REIT to exchange a $400 million sukuk for new paper has triggered an angry backlash from some investors that include Dubai-based Shuaa Capital. The UAE’s largest shariah-compliant real estate investment trust had offered sukuk holders the option of exchanging their unsecured notes for a secured, but longer-dated alternative. The existing 5.125 percent profit rate would be maintained for the new secured sukuk. While the existing paper matures in 2022, the new instrument would extend to 2024. Equitativa, the manager of Emirates REIT, said on Tuesday that the large majority of sukuk holders that have already voted, were in support of the company’s exchange offer and encouraged all certificate holders to vote by 7 June. But some investors, including Dubai-based Shuaa Capital are not happy and say the company’s claim that sukuk holders will benefit from the exchange was just “lip service.” “Certificate holders are not being adequately compensated for the risks that they are being asked to take,” Ajit Joshy, head of public and private markets at Shuaa Capital told Bloomberg TV on Tuesday. He called on the REIT owner to provide additional assets as security for their new proposal as well as cutting their own management fees to a level that was closer to other real estate trusts operating in the region. “What they have done is not sufficient. We believe there are at least another $200 million of assets . . . which can be provided to sukuk holders as additional security. More importantly, what we should be focusing our attention on is the deteriorating cash flow situation of the company.” He added: “There are five or six REITs listed in the region. The average management fee which is charged on a net asset basis is about 1.3 percent as compared to Emirates REIT management fee for the year 2020 which was about 4.2 percent. If this thing is pushed out for another three and a half years, we as sukuk holders will potentially be losing another $40 or $50 million of value in incremental management fees between now and 2024.” Emirates REIT is the UAE“s largest listed shariah-compliant real estate investment trust (REIT). It was the first REIT incorporated in the UAE in 2010 and has approximately $690 million of assets under management according to its website. The REIT is licensed by the Dubai Financial Services Authority (DFSA).