Emirates REIT (CEIC) Limited ‘Emirates REIT’ or the ‘REIT’, the first Shari’a compliant regulated real estate investment trust incorporated in the Dubai International Financial Centre (the ‘DIFC’), today announces its interim results for the six month period ended 30 June 2014. Emirates REIT is managed by Emirates REIT Management (Private) Limited (the ‘REIT Manager’).
•Net Profit for the 6 month up +194% to $34.15m from $11.61m for the same period in 2013.
•Portfolio value increased by +73%, to $559.65m (Dhs2.06bn) from $323.13m (Dhs1.19bn) at the end of 2013.
•Net asset value per share rose to US$ 1.3939. This represents a total return of +6.8% for the first six months of 2014 which equates to an annualised total return of +13.6%.
•Reduction in ongoing borrowing rates by 42%, from 5.5% to a current rate of 3.21%.
During the first half of 2014, Emirates REIT’s ordinary shares were admitted to the Official List of Securities of the Dubai Financial Services Authority ‘DFSA’ and to trading on NASDAQ Dubai Limited under the ticker symbol ‘REIT’. The admission followed a successful international IPO, which was 3.5 times over-subscribed, raising $201m.
Since the listing in April, Emirates REIT used the net proceeds of the IPO to fund two successful acquisitions.
In May, the REIT acquired Le Grande Community Mall for Dhs118.2m. Le Grande consists of 22 individual retail and food and beverage units on the ground and podium floors, as well as 161 basement car park spaces. Located in the Marina area, one of the most popular areas of new Dubai, the retail units have good occupancy rates and strong yields.
In June, the REIT entered into an agreement with Emirates NBD Properties to acquire 15.64 office floors and 706 car parking spaces in the DIFC’s Index Tower, for a cash consideration of approximately Dhs613.4m. This, our largest acquisition to date, raises the REIT’s ownership of the office floors in this Grade A building to 67%.
With these acquisitions, Emirates REIT’s property portfolio grew to 11 properties within Dubai. Excluding the Index Tower assets, the overall occupancy increased from 93% as at 31 December 2013 to 97% as at end of June 2014 and the total passing income increased from Dhs110m to Dhs129m.
The average weighted unexpired lease term across the portfolio is now at 8.8 years.
Emirates REIT has also successfully secured a significant reduction in borrowing rates on all its financing facilities. The new rate is 3 month EIBOR +2.5% (which currently equates to 3.21%) which is down by 42% from the previous cost of 5.5%.
Overall debt levels at 30 June 2014 remain healthy at 23% of gross assets.
Abdulla Al Hamli, Chairman of the REIT Manager, said, “Since Emirates REIT became a public listed entity in April, I am pleased to report strong progress at both a financial and operational level. In just a few months we delivered what we have promised our shareholders; using the net proceeds to increase the size of the portfolio. The two acquisitions demonstrate that there are still significant opportunities within the Dubai market to invest at attractive prices in prime buildings, which offer substantial growth. We will continue to work on our sizeable acquisition pipeline, located mainly in Dubai and across all commercial sectors.”
Sylvain Vieujot, Executive Deputy Chairman of the REIT Manager, said, “The first six months of 2014 were marked with milestones. We continued to grow our portfolio, adding prime assets in strategic locations, whilst we launched our successful IPO. We are confident that demand for commercial property in Dubai will continue to grow. With our ability to add significant value through a professional management of the portfolio, we aim to continue to maximise the value for our shareholders.”
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