Dubai, United Arab Emirates, 7 August 2023: ENBD REIT (CEIC) PLC, the Shari’a compliant real estate investment trust managed by Emirates NBD Asset Management Limited, has announced its financial results for the first quarter ended 30th June 2023. ENBD REIT's NAV stood at USD 183.4 million or USD 0.73 per share, compared to a USD 179.4 million cum dividend NAV for the previous quarter. When adjusting for the USD 4.5 million final dividend payment in July, NAV increased by 4.8% quarter-on-quarter. This performance comes as the Company continues to capture the benefits from the market recovery and strong leasing activity.
ENBD REIT’s property portfolio value rose 1.5% to USD 375 million this quarter and 5.1% year-on-year supported by occupancy climbing to 92% compared to 88% as at 31st March 2023 and 83% a year ago. The continued improvement reflects the benefits of the investments made to improve the tenant offering across key assets driving gross income to USD 8.3 million, up 2.7% Q-o-Q and 10.3% Y-o-Y. Operating expenses rose 5.8% to USD 1.8 million during the quarter in line with the continued improvements in occupancy across the portfolio.
Despite finance costs more than doubling compared to the previous year, the successful hedging of 50% of the debt this quarter is already having positive benefits. As a result, finance costs decreased by 2.6% this quarter to USD 3.6 million, further enhancing predictability during the current interest rate cycle. Fund expenses rose on the back of the improved valuations and inflationary pressures on service providers.
Melanie Fernandes, Portfolio Manager at Emirates NBD Asset Management, said:
“The continued increase in the portfolio occupancy to 92%, the highest since 2018, and improved income, is supporting the positive trend in our valuation. We anticipate sustained market positivity and rising occupancies to drive income growth.”
Asif Siddique, designated CFO for ENBD REIT, added:
“On the cost side, the proactive steps taken to successfully hedge 50% of our exposure during the quarter will continue to mitigate the impact of the current interest rate cycle on finance costs.
In the current market, potential disposals are being carefully considered to lower the LTV towards our target range of 40-45% which in turn should also improve shareholder returns.”
The Weighted Average Unexpired Lease Term (“WAULT”) improved to 4 years for the overall portfolio on the back of the strong leasing activity. The Loan-to-Value (“LTV”) ratio reduced to 52% in line with the valuation improvements.
