ENBD REIT's property portfolio value in Q1 up 5.5% to $375mln

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UAE - ENBD REIT, the shari’a compliant real estate investment trust managed by Emirates NBD Asset Management Limited, has announced that the value of its property portfolio rose 1.5% to $375 million this quarter and 5.1% year-on-year, supported by the occupancy climbing to 92% compared to 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 $8.3 million, up 2.7% Q-o-Q and 10.3% Y-o-Y.

The operating expenses rose 5.8% to $1.8 million during the quarter in line with the continued improvements in occupancy across the portfolio.

ENBD REIT said its net asset value (NAV) stood at $183.4 million ($0.73 per share) compared to a $179.4 million cum dividend NAV for the previous quarter. When adjusting for the $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, it stated.

On the Q1 performance, 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," she stated.

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 $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, she added.

Asif Siddique, designated CFO for ENBD REIT, said: "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," he added.