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- Portfolio occupancy improves to 84% based on strong leasing activity
- Al Thuraya Tower 1 occupancy increases by 15%, reaching 50% following major refurbishment
- Property portfolio value increases to USD 362 million
- Net Asset Value continues to improve to USD 172 million or USD 0.69 per share
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 Net Asset Value (“NAV”) as at 30 September 2022, reflecting a continued improvement to USD 172 million (USD 0.69 per share), up from USD 166 million the previous quarter and USD 164 million as of 30 September 2021.
The property portfolio value increased by USD 4.7 million from the previous quarter to USD 362 million, driven by a portfolio-wide improvement in occupancy rates reaching 84%, from 75% this time last year, thanks to a sustained momentum in leasing activity as the real estate market experiences strong growth.
As a result of a pickup in office rentals, Al Thuraya Tower 1, ENBD REIT’s flagship asset in Dubai Media City, recently achieved 50% occupancy, following the completion of a major refurbishment in March 2022. In addition, Burj Daman, the REIT’s third largest asset by value in DIFC, also achieved 80% occupancy, marking another milestone as the highest occupancy this asset has achieved since its acquisition in 2015.
Anthony Taylor, Head of Real Estate at Emirates NBD Asset Management, said:
“We are pleased to announce a robust performance across the portfolio for the first half of the year, building on the positive trajectory initiated in the first quarter. Occupancy rates and gross income continued to rise, driving the uptrend in portfolio valuations across all sectors.
In a buoyant Dubai real estate market, we will maintain a cautious risk management strategy and prudent capital management approach to ensure that we continue to deliver reliable returns to our shareholders, especially in a rising interest rate environment which is set to offset some of the positive performance in our business in the upcoming quarters. As previously stated, we will also consider any attractive exit opportunities to ensure an optimal allocation of properties in our portfolio.”
ENBD REIT achieved a robust gross rental income of USD 15 million, up 0.7% from the same period last year, as occupancy improved despite the lower rent from Uninest following the renegotiation of the lease during Covid. The Weighted Average Unexpired Lease Term (“WAULT”) stands at 4.13 years for the portfolio, and the Loan-to-Value (“LTV”) ratio remains stable at 54%.
Melanie Fernandes, Senior Portfolio Manager at Emirates NBD Asset Management, said:
“Our focus on strategic asset upgrades and renovations has proven to be very beneficial, enabling us to enhance the attractiveness of our buildings, leading to higher occupancy rates across the portfolio. In particular, Al Thuraya Tower 1, our biggest refurbishment project to date, has recently risen above the 50% occupancy, with leasing activity picking up following an extensive refurbishment to the ground floor lobby, toilet and changing room facilities, podium level facilities as well as a upgraded lift system.
The combination of our active asset management strategy and strong focus on sustainable real estate to create comfortable, modern, and sophisticated spaces for tenants puts us in a favourable position to take advantage of the continued improvements in the Dubai property market.”
Operating expenses went up by only 2.2% from the same period last year, as ENBD REIT continued to invest in the maintenance and modernization of its assets to drive occupancy across the portfolio. Fund expenses increased by 3.7% from the same period last year, in line with the movement in valuations. Moreover, finance costs went up 5.5% from the same period last year, mainly due to a challenging global macro-economic environment which has resulted in rising inflation and interest rates.
Adopting a prudent approach to maintain flexibility in a rising interest rate environment, the management team recommended to the Board of Directors an interim dividend of USD 4.5 million or USD 0.018 per share, in line with the first half of last year and generated from the net rental income. The shares will trade ex-dividend on 6 December 2022 with the payment date set for 21 December 2022.
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 362 million |
| NAV (cum-Div) | USD 172 million** (USD 0.69 per share) |
| LTV (on GAV) | 54% |
| Occupancy | 84% |
| WAULT (years) | 4.13 |
| No. of properties | 11 |
| Sectors | Office 68% |
|
| Residential 14% |
|
| Alternative 18% |
*All figures are as at 30 September 2022
*Cum-dividend.
-Ends-
For more information:
ENBD REIT (Investor Relations)
Mona Zahooruddin
ENBDREITIR@EmiratesNBD.com
Company Secretary
Jean Kenny Labutte
JeanK@apexfunddubai.ae
Apex Fund Services (Dubai) Ltd.
Instinctif Partners (Public Relations)
Lisa Webber
Lisa.Webber@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”), 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
