Strong growth in Portfolio Value, Income, FFO and NAV
Continuing strong rental growth and conversion of rental potential into contracted cash flow
Strong operational progress in Q3 2016
New business development opportunities
The improvements and growth of the portfolio in recent years resulted in Emirates REIT becoming the world’s largest listed Shari’a compliant REIT both by total assets and by market capitalization.
Growth in Portfolio Value, Income, FFO and NAV
The total portfolio value stood at USD 742 million, a year-over-year increase of 13% (USD 85 million).
The total property income for the 9 months also increased 22% to USD 36.3 million (9M2015: USD 29.8 million).
The Net Asset Value increased to USD 1.60 per share, or USD 480.7 million.
As a result of the strong underlying performance in the first nine months of 2016, the FFO (funds from operations), or cash profit, increased to USD 7.8 million (an year-over-year increase of 33%).
Rental growth and conversion into contracted cash flow
In the third quarter 2016, rental income increased 19.7% to USD 11.4 million (Q3 2015: USD 9.5 million).
As at 30 September 2016, the total occupancy rate across the portfolio reached 80%.
The weighted average lease expiry of the total portfolio was 8.5 years.
The increase in property income is mostly attributable to the leasing of the Index Tower Offices which stands at 24% (19% including the retail) as at 30 September 2016 (end Q3 2015: 4%) and the leasing of the Jebel Ali School.
Strong Operational Achievement in Q3 2016
During the period, the construction (development) of the new Jebel Ali School campus was completed on time and within the budget. The property, located in the Akoya development in Dubailand, saw an 18.3% post completion valuation gain of USD 12.8 million.
Following a similar model, the REIT launched another school development, with the acquisition of a leasehold plot in Dubai Investments Park, the immediate leaseback to British Columbia Canadian School and start of the development.
The overall investment is estimated to be AED 88 million (USD 24 million). The estimated IRR on this project is expected to exceed 12% of the total development costs.
As at 30 September 2016, the education sector represented 28% of the REIT’s portfolio income, providing a strong and stable income stream.
New Business Development Opportunities
Emiri Decree in Ras Al Khaimah:
Just after the period end, the REIT manager’s parent, Equitativa Real Estate Limited, was granted an exclusive Emiri Decree, allowing REITs managed by the Equitativa Group to acquire property in Ras Al Khaimah. This Decree directly benefits Emirates REIT, by enlarging its acquisition pool to Ras Al Khaimah onshore properties.
Total debt at the end of Q3 2016 was USD 269 million. This translates into a Loan to Value (LTV) ratio of 35%.
As a post-reporting-period event, Emirates REIT also announces today that it has secured a USD 54 million (AED 197 million) Islamic finance facility with Noor Bank PJSC.
The facility is a fully amortized loan over 10 years with a profit rate set at 3-months EIBOR +2.5%.
Emirates REIT shall draw-down the full amount of the facility to provide the funds to finance the construction of British Colombia Canadian School, further acquisitions and general corporate use.
The LTV ratio of the REIT including this new facility stands at 39%, well below the REIT’s regulatory maximum LTV of 50%.
Largest Shari’a Compliant REIT in the World
Emirates REIT is now the largest publicly listed Shari’a compliant REIT in the world both by total assets and by market capitalization.
Total assets reached USD 773 million with a market capitalization of USD 333 million whilst Sabana Shari'a Compliant Industrial Real Estate Investment Trust from Singapore, previously the largest listed Shari'a compliant REIT has S$1.06 bn (USD 762 million) of total assets (as at 30 September 2016) and has a current market capitalization of USD 276 million (source: Sabana website and Bloomberg).
Emirates REIT represents 39% of the total Assets Under Management of the Equitativa Group.
Total AUM of Equitativa Group stands at USD 2 Billion (AED 7.2 billion).
Sylvain Vieujot, Chairman of Equitativa and CEO of Emirates REIT Management, commented:
“Emirates REIT continues to record strong growth in cash flow, which should persist as occupancy increases and the portfolio grows.
Becoming the largest listed Shari’a compliant REIT in the world is an important milestone as it will increase our international exposure and strengthen our growth and liquidity.
This achievement would not have been possible without the vision of the UAE’s leaders who established a stable financial ecosystem with solid laws and regulations that have allowed the United Arab Emirates to become a world leader in Islamic finance. We are proud to be a part of that vision and look forward to continue contributing to further enhance and cement the United Arab Emirates’ position as the global center for Islamic finance.
Finally, we would also like to thank our investors and board members for their consistent support and our team for their hard work.”
About Emirates REIT
Emirates REIT, (NASDAQ Dubai: REIT; ISIN: AEDFXA1XE5D7), the first Shari’a compliant Real Estate Investment Trust listed on NASDAQ Dubai, is a Dubai-based real estate investment trust established to invest in principally income-producing real estate in line with Shari'a principles. It currently owns nine freehold or leasehold properties comprising commercial, retail and education assets. Emirates REIT benefits from an exclusive Ruler's Decree’s permitting it to purchase properties in onshore Dubai and Ras Al Khaimah.
The REIT Portfolio
Emirates REIT invested in education, commercial mix and retail sectors.
The portfolio consists of 9 properties.
GEMS World Academy Dubai is an education facility located in Al Barsha South
Jebel Ali School is an education facility located in Akoya by Damac, Sport City
British Columbia Canadian School is an education facility located in Dubai Investments Park
Commercial mix (including offices+retail+terraces+storage)
Building 24 is a low-rise building featuring commercial office and retail space located in Dubai Internet City – a well-established commercial district in Dubai
Loft Offices (Loft 1, Loft 2 and Loft 3) are a cluster of three low-rise commercial buildings located in Dubai Media City.
Office Park is a commercial building located in Knowledge Village within Dubai Internet City.
Indigo 7 is a low-rise building located on Sheikh Zayed Road.
Index Tower is a mixed-use property located in the DIFC. The REIT’s assets in Index Tower consists of the entire retail area located over ground, podium and sky lobby levels, 17 floors of office space and 1426 car parks.
Le Grande Mall in Dubai Marina, consisting of 22 individual retail and F&B outlets
For further information, please refer to our website www.reit.ae, or contact :
+971 4 405 7348/
Rupert Young / Tala Toukan
+971 4 446 6270
© Press Release 2016