The Knowledge Fund in Dubai has announced it will freeze any increase in rental value on assets leased to investors in the education sector for the next academic year 2018-2019.
Hesham Khalifa Al Qaizi, CEO of the initiative, which is aimed at supporting the educational institutions and reduce their operational costs, confirmed the move in a statement on Sunday, adding the freeze would be applicable to all its investors who are subject to contract renewal.
“This initiative reflects the efforts of the Knowledge Fund to support the development of the education sector and encourage investment in education,” he said. “The revision of the rent value and any subsequent increase, if applicable, will be postponed until after the specified period.”
ENBD REIT, the real estate investment arm of Dubai banking group Emirates NBD, could be one affected by the move given its South View School – scheduled for completion in August 2018 – makes up 3% of its total portfolio value.
The school is part of the ‘alternative’ segment of the portfolio (totalling 16% of all holdings), which ENBD REIT is looking to grow to 25-35%, according to the company's website.
Al Qaizi added: “The continuous efforts of the Knowledge Fund fall in line with the wise leadership's directives to establish a true and effective partnership with the private sector and provide an attractive environment for investments in order to support and further develop the educational drive in Dubai for the benefit if Emiratis and residents.”