• Property portfolio value up to USD 365 million
  • Net Asset Value improves to USD 173 million 

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”) at 31 December 2022. ENBD REIT’s NAV amounted to USD 173 million (USD 0.69 per share), up from USD 168 million at 31 December 2021, reflecting the continued positive momentum in the Dubai real estate market and the benefits from effective asset management initiatives despite the rising interest rate environment.

Overall, strong leasing activity resulted in occupancy rates reaching 85%, which together with an improved gross income, saw the property portfolio value increase by a further 0.5% or USD 1.8 million during the quarter to USD 365 million at 31 December 2022. Active asset management remained a priority and investments in the maintenance and modernization resulted in Al Thuraya breaching 50% occupancy during the quarter and Burj Daman, the REIT's third-largest asset by value in DIFC, reaching 83% occupancy, marking the highest occupancy since the asset’s acquisition.

Anthony Taylor, Head of Real Estate at Emirates NBD Asset Management, said: 

“We are pleased to see valuations continue to improve in line with the robust leasing activity and improving rental rates across the portfolio as well as Dubai's overall real estate market sentiment. The portfolio’s occupancy level of 85% achieved during the quarter is testament of the benefit from the investments in refurbishments made over the past 24 months with Al Thuraya in Dubai Media City and Burj Daman in DIFC showing particularly positive occupancy trends.  

Whilst our outlook remains positive, we’ve recently undertaken a comprehensive strategic review of our portfolio to assess exit opportunities for non-core assets that will enable us to reduce our debt exposure in the continuing rising interest rate environment.”

ENBD REIT grew its net rental income to USD 7.6 million for the nine months to 31 December 2022, a USD 2.1 million increase on the previous year where reversals were required due to the Uninest lease restructuring in December 2021. The Weighted Average Unexpired Lease Term (“WAULT”) decreased to 3.92 years for the overall portfolio due to natural progression to expiry in the quarter and no significant leases being renewed during this period. The Loan-to-Value (“LTV”) ratio remained steady at 54% with opportunities to exit non-core assets and bring down the debt exposure being actively assessed by the management team.

Melanie Fernandes, Senior Portfolio Manager at Emirates NBD Asset Management, said:

“Active asset management and sustainability remained our main areas of focus during the quarter, and we were pleased to see The Edge successfully awarded LEED certification, the most widely-recognised green building rating system in the world, with other assets in the portfolio now underway, including South View School and Al Thuraya 1 which recently received the ‘WELL Health’ Certification. These initiatives further increase the attractiveness of the assets to drive occupancy as well as other benefits such as the potential for lower financing costs overtime.”

Operating expenses were 0.9% higher compared to the same period last year as direct expenses increased in line with the improved occupancies whilst fund expenses rose slightly on the back of a USD 320,000 increase in provision for doubtful debt. Finance costs increased by 12.7% in comparison to the same period of the previous year, due to rising interest rates.