ENBD REIT’s Property Portfolio Value Increases to $375 Million in Q1, Reflecting Strong Growth

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ENBD REIT, the shari’a compliant real estate investment trust managed by Emirates NBD Asset Management Limited, has reported a robust performance in its Q1 results. The value of its property portfolio has risen by 1.5% to reach $375 million for the quarter, marking a significant 5.1% increase year-on-year. The positive growth is attributed to several factors, including a surge in occupancy rates, which climbed to 92% compared to 83% in the previous year.

The continuous enhancement of tenant offerings across key assets has contributed to driving gross income to $8.3 million, showcasing a 2.7% increase quarter-on-quarter and a substantial 10.3% increase year-on-year.

Operating expenses also experienced growth, rising by 5.8% to $1.8 million during the quarter, in line with the ongoing improvements in portfolio occupancy.

ENBD REIT’s net asset value (NAV) stood at $183.4 million ($0.73 per share), representing an increase from the previous quarter’s cum dividend NAV of $179.4 million. After accounting for the $4.5 million final dividend payment in July, the NAV saw a notable 4.8% quarter-on-quarter increase.

This impressive performance is a result of ENBD REIT’s ability to capitalize on the market’s recovery and capitalize on strong leasing activity.

Melanie Fernandes, Portfolio Manager at Emirates NBD Asset Management, commented on the Q1 performance, stating, “The continued increase in the portfolio occupancy to 92%, the highest since 2018, and improved income, is supporting the positive trend in our valuation.”

She added, “We anticipate sustained market positivity and rising occupancies to drive income growth.”

Despite a more than doubling of finance costs compared to the previous year, the successful hedging of 50% of the debt in this quarter has already yielded positive outcomes. Consequently, finance costs decreased by 2.6% to $3.6 million, providing greater predictability during the current interest rate cycle. Fund expenses have risen due to improved valuations and inflationary pressures on service providers.

Asif Siddique, designated CFO for ENBD REIT, highlighted the proactive steps taken to hedge exposure during the quarter, which 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.

The positive performance and strategic actions underscore ENBD REIT’s commitment to optimizing its portfolio’s performance and enhancing shareholder value in a dynamic market environment.