Staff Report
Dubai, UAE
ENBD Real Estate Investment Trust (REIT), the Shari’a compliant real estate investment trust managed by Emirates NBD Asset Management Limited, announced its financial results for the second quarter ended September 30, 2024. ENBD REIT’s Net Asset Value (“NAV”) stood at US$202 million or US$0.81 per share, compared to US$199 million for the previous quarter and US$189 million the previous year, a respective 1.3 percent quarter-on-quarter (Q-o-Q) and 6.57 percent year-on-year (Y-o-Y) increase.
ENBD REIT is now six months into its turnaround journey, prioritising improving Funds From Operations (FFO) to enhance dividend payments for greater shareholder value. The strategy has been delivering positive results, with a recommendation being made to shareholders for an interim dividend payment of US$5 million, up from US$3.5 million in the same period last year. This equates to a yield of 5 percent on NAV and 12.2 percent on share price as on September 30, 2024 (annualised), compared to the previous financial year’s yield of 3.9 percent on NAV and 8.6 percent on share price. This progress reflects ENBD REIT’s commitment to aligning dividends with improving FFO and addressing the disconnect between share price and NAV.
FFO increased by 42 percent Y-o-Y to US$5.1 million from US$3.6 million, supported by higher occupancies and rental rates across the portfolio, lower finance costs due to reduced credit margins, and debt repayment from the proceeds of the Remraam property sale. Operational efficiencies, including the consolidation of service providers, further bolstered performance.
The property portfolio value remained stable at US$379 million following the sale of the Remraam residential assets, with portfolio valuations improving by 1.8 percent this quarter, up by US$6.4 million. Overall occupancy surged to 94 percent Q-o-Q, marking the highest level in the REIT’s history. This milestone reflects exceptional leasing performance, particularly in flagship assets such as The Edge and Burj Daman, both of which achieved full, or near-full occupancy during the period. In addition to this, the occupancy for DHCC 49 has increased by 13 percent Q-o-Q to reach 93 percent.
Samir Kazi, Head of Real Estate at Emirates NBD Asset Management and CEO of ENBD REIT, said, “Six months into our turnaround strategy, we are proud to deliver tangible results and enhanced value to our shareholders, marked by a 42% year-on-year increase in FFO, which has supported our ability to increase dividend payments. This achievement, coupled with record-breaking occupancy levels, reflects the ongoing success of our turnaround journey and the strength of our portfolio. We remain focused on improving FFO and increasing dividend payments and are confident in driving even greater value for our shareholders in the quarters ahead.”
Operating expenses are up 8.8 percent compared to the same quarter last year largely due to an increase in repairs and maintenance. Fund expenses decreased by 32.8 percent from the last quarter mainly on account of a decrease in provisions. Finance costs declined by 2.7 percent from the previous quarter.
Ends
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