PHOTO
- Net Asset value up 8.5% Y-o-Y to USD 195 million (USD 0.78 per share)
- Proposed final dividend of USD 4.0 million, in line with net rental income generated
- Occupancy at record high of 93%, reflecting successful leasing strategies
- WELL Health-Safety Rating renewed for Al Thuraya, in line with sustainability agenda
- Turnaround journey initiated with focus on improving cashflow and associated dividends
Dubai, United Arab Emirates: ENBD REIT (CEIC) PLC (“ENBD REIT”), the Shari'a compliant real estate investment trust managed by Emirates NBD Asset Management Limited, has announced its full year results for the financial year ended 31 March 2024. The REIT reported a Net Asset Value (NAV) of USD 195 million or USD 0.78 per share, marking a solid 8.5% increase from the previous year.
ENBD REIT’s property portfolio value increased 4% to USD 384 million driven by an enhanced occupancy rate of 93%, up from 88% a year ago, and the highest rate ever achieved by the REIT. The investments across multiple properties, combined with active asset management strategies, resulted in gross income increasing to USD 34.5 million from USD 31.3 million the previous year. Net income (including non-cash movements in valuations) was slightly lower than the previous financial year at USD 21.0 million. The net rental income or Funds From Operations (FFO), which excludes non-cash movements in valuations and is used for dividend payments to shareholders decreased to USD 7.8 million from USD 9.2 million the previous year, mainly due to rising financing and operating costs offsetting the revenue gains.
Significant asset management activities took place during the year, including the refurbishment projects at Binghatti Terraces, both DHCC 49 and 25, and Arabian Oryx House. Additionally, the international WELL Health-Safety certification for Al Thuraya Tower 1 has been renewed, portraying a steadfast commitment to health, safety, and sustainability. These efforts, alongside robust leasing activities, positively influenced asset valuations.
The year also saw board and management changes, including Ali Al Mazroei becoming Chairman and Samir Kazi taking over as CEO. Following a comprehensive review of the portfolio and engagements with key stakeholders, ENBD REIT has embarked on a turnaround journey to address the portfolio performance through a comprehensive plan centred on three key pillars: 1) improving operating income through a bottom-up approach, 2) Managing financing costs, and 3) Optimizing the portfolio to enhance overall returns. These initiatives are anticipated to drive profitability with initial benefits coming through over the next 6 to 12 months.
Samir Kazi, Head of Real Estate at Emirates NBD Asset Management and CEO of ENBD REIT, said:
“We are pleased with the results achieved this financial year. The proactive approach to asset management and leasing has driven the highest occupancy rates in the REIT’s history and supported the portfolio value uplift. We expect further positive momentum in Dubai’s real estate market conditions with healthy demand for high-quality sustainable assets, despite the persistent high interest rate environment.
Following a comprehensive review of the portfolio, we have identified a clear turnaround plan for ENBD REIT to unlock value for shareholders. Our focus will be on enhancing the attractiveness of our properties to drive income and occupancy levels, manage our financing and other costs whilst improving the overall mix of the portfolio. This is the beginning of our turnaround journey and I am confident in our ability to demonstrate improvements in the next 9 to 12 months as we execute our sustainable growth strategy.”
The portfolio’s Weighted Average Unexpired Lease Term (WAULT) stands at 3.74 years, with the Loan-to-Value (LTV) ratio maintained at 50.6%. During the first quarter of the year, 50% of the debt was successfully hedged to mitigate the impact of the rising interest rates in the years ahead and improved predictability during the current interest rate cycle. Additional opportunities to lower financing costs are under review.
The proposed final dividend of USD 4 million payable to shareholders is equivalent to an annualized 4.1% of the cum-dividend NAV and an annualized 9.1% of the share price, bringing the total dividend for the year to USD 7.5 million. Following the AGM and subject to shareholders’ approval, the shares will trade ex-dividend on 30 July 2024, with the record date set as 31 July 2024 and the payment date 27 August 2024.
Muhammad Asif Siddique, Senior Finance Manager at Emirates NBD Asset Management and Chief Financial Officer for ENBD REIT, added:
"The portfolio performed well, supported by investments to maintain the attractiveness of our properties, drive high occupancy levels and in turn increase valuations. Whilst gross income improved, the increase in financing costs due to the higher interest rate environment and higher operating expenses associated with the improvement in occupancies impacted our net income. Having hedged 50% of our debt early in the financial year, we are now reviewing additional opportunities to lower costs further whilst maintaining a prudent capital management approach as we execute our turnaround strategy.”
ENBD REIT’s financial results were prepared in accordance with International Financial Reporting Standards (IFRS) and audited by Deloitte.
-Ends-
For more information:
ENBD REIT (Investor Relations)
Mona Zahooruddin
ENBDREITIR@EmiratesNBD.com
Company Secretary
Akeela Bharuchi
cosecme@equiomgroup.com
Equiom Corporate Services
Instinctif Partners (Public Relations)
Arief Zulkifli
Arief.Zulkifli@instinctif.com
ABOUT ENBD REIT
ENBD REIT (CEIC) PLC (“ENBD REIT”) is a Shari’a compliant real estate investment trust managed by Emirates NBD Asset Management Limited (the “Fund Manager” - Regulated by the DFSA), listed on Nasdaq Dubai under ticker ENBDREIT. ENBD REIT is a closed-ended investment company that was incorporated by the Fund Manager to invest in a diversified Portfolio of Shari’a-compliant real estate assets in the UAE. ENBD REIT has an unlimited duration and was established in the DIFC by the Fund Manager on 18 July 2016 under the Companies Law with the name “Emirates Real Estate Fund Limited” and with registration number 2209. The Fund subsequently changed its name to “ENBD REIT (CEIC) Limited” and later ENBD REIT (CEIC) PLC in line with the new DIFC Companies Law. ENBD REIT is categorised under DFSA law and regulations as a Public Fund, a Domestic Fund, an Islamic Fund, a Property Fund and a Real Estate Investment Trust (REIT). ENBD REIT has been established with the main investment objective of generating income returns and capital appreciation from real estate assets. ENBD REIT plans to achieve its objectives through the following strategies: (i) prudent acquisitions with a focus on achieving diversification; and (ii) active asset management and enhancement. For more information, visit: www.enbdreit.com
PORTFOLIO
Office:
Al Thuraya 1 (Dubai Media City)
A G+29-story high rise commercial tower, located at a prime location in Dubai Media City with views over Barsha Heights and Palm Jumeriah.
Burj Daman (DIFC)
Two and a half floors (the fund fully owns the 10th and 14th floors and half of the 15th floor) in the commercial portion of the tower in the DIFC.
DHCC 49 (Dubai Healthcare City)
G+5-story commercial complex located in the Dubai Healthcare City free zone.
DHCC 25 (Dubai Healthcare City)
G+6-story commercial tower located in the Dubai Healthcare City free zone
The Edge Building (Dubai Internet City)
A G+6-story fully leased, prime grade A office building recently constructed and located in the Dubai Internet City free zone. Oracle is the largest tenant occupying 85% of the office space.
Residential:
Arabian Oryx House (Barsha Heights)
A residential tower with 128 units in the free zone Barsha Heights, Dubai. Mainly comprises units of one, two and four-bed apartments.
Binghatti Terraces (Dubai Silicon Oasis)
A residential tower with 201 residential and 5 retail units in Dubai Silicon Oasis, constructed by developers with an established track record.
Remraam Residential (Dubailand)
Two residential towers offering 105 units in mainly 1 & 2-bedroom apartments
Alternative:
Uninest Dubailand (Dubailand)
A 424-bed student accommodation property located close to Dubai Academic City, serving students attending university across the city. 100% leased to global student accommodation provider, GSA.
South View School (Remraam)
A 132,000 sq. ft. British curriculum primary and secondary school operated by Interstar Education.
Souq Extra Retail Centre Phase 1 (Dubai Silicon Oasis)
Community centre in Dubai Silicon Oasis with over 36,000 ft² of gross leasable area, comprising 25 retail units fully let to blue-chip tenants.
HIGHLIGHTS*
| Property portfolio value | USD 384 million |
| NAV | USD 195 million* (USD 0.78 per share) |
| LTV (on GAV) | 51% |
| Occupancy | 93% |
| WAULT (years) | 3.7 |
| No. of properties | 11 |
| Sectors | Office 67% |
|
| Residential 16% |
|
| Alternative 17% |
*All figures are as at 31st March 2024
