Dubai, United Arab Emirates, 24 November 2020: ENBD REIT (CEIC) PLC (“ENBD REIT”), the Shari’a compliant real estate investment trust managed by Emirates NBD Asset Management Limited, has announced its Net Asset Value (“NAV”) as at 30 September 2021. ENBD REIT’s NAV stood at USD 164 million (USD 0.66 per share) marking a decrease from USD 180 million at the year ended 31 March 2021, predominantly due to ongoing valuation pressures. The property portfolio value was adjusted down to USD 346 million (31 March 2021: USD 360 million) reflecting the prolonged soft real estate market conditions and lower rental income predominantly in the office sector which makes up the majority of ENBD REIT’s real estate holdings.
Overall occupancy across the portfolio remains stable at 76% compared to 31 March 2021 with the softer occupancy in the office portfolio, especially al Thuraya Tower 1 which is undergoing a major upgrade, partially offset by positive leasing performances from assets in the residential portfolio which are starting to recover during the quarter and the resilient education and retail assets in the alternative sector which are near fully let. The Weighted Average Unexpired Lease Term (“WAULT”) stands at 4.17 years for the portfolio.
ENBD REIT’s operating expenses for the six-month period ending 30 September 2021 reduced by 12% due to a sustained focus on costs management and finance costs reduced by 9% over the same period due to lower interbank interest rates. The refinancing of our debt is expected to lower the REIT’s finance costs further going forward. The Board of Directors approved an interim dividend of USD 4.5 million or USD 0.0180 per share from the net rental income generated during the first half of the year, which is marginally up 2% from the previous dividend paid for the six-month period ending 31 March 2021. The shares will trade ex-dividend on 6th December 2021, with the record date set as 7th December 2021 and the payment date on 28th December 2021.
Anthony Taylor, Head of Real Estate at Emirates NBD Asset Management, said:
“Our occupancy rate has remained stable during the first half of the year against a backdrop of sustained pressures on valuations and rental income. We are investing in our office portfolio and successfully completed two refurbishments below budget during the period whilst we are also on track to finalise the cost-efficient upgrades at Al Thuraya Tower 1 which will support improved lettings. Effective cost management remains a focus and the refinancing of our debt facilities will be an important step in lowering our finance costs and strengthening our financial position. We will also continue to assess disposal opportunities to realise value for shareholders and manage loan-to-value targets as we prepare for a post-pandemic environment.”
ENBD REIT’s Loan-to-Value (“LTV”) ratio increased to 54% as a result of the continued downward pressure on valuations across the property portfolio. The REIT’s management maintained regular contact with lenders during the period and will continue to do so with the new lenders to ensure all covenants are maintained.
