ENBD REIT announces Q3 NAV of USD 168 million (USD 0.67 per share)

• Property portfolio value stabilising at USD 357 million 
• Portfolio occupancy maintained at 77%
• Interim dividend paid on 28 December 2021

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”) as at 31 December 2021. ENBD REIT’s NAV stood at USD 168 million (USD 0.67 per share), as compared to USD 164 million in September 2021 and USD 184 million in December 2020, indicating early signs of value stabilisation. ENBD REIT property portfolio value stands at USD 357 million, an increase of 3% compared to the previous quarter. This positive movement is largely due to a revised valuation methodology across the portfolio in line with regulations. 

Occupancy across the portfolio remains stable at 77% compared to 76% for the previous quarter, due to positive leasing performance from assets in the residential segment which are benefiting from improving market conditions. The Weighted Average Unexpired Lease Term (“WAULT”) stands at 4.30 years for the portfolio. 

The Company’s operating expenses for the nine-month period ending 31 December 2021 reduced by 6.6%, whilst fund expenses went down by 20% over the same period. Finance costs for the nine-month period, however, increased by 3.5% due to one off costs relating to the refinancing in the period. When excluding these one-off expenses of USD 1.4 million, finance costs have decreased by 20% over this period, due to a lower interest rate environment. The refinancing of ENBD REIT’s debt in December 2021 on attractive commercial terms will further reduce finance costs going forward and should, to some extent, mitigate the impact of likely interest rate increases anticipated in 2022 and the coming years.

Despite ENBD REIT generating positive cashflow from operating activity in the quarter, the net rental income or funds from operations (FFO) booked was negative USD 300,000 for this period due to two significant events which led to non-cash, accounting adjustments amounting to USD 3.6 million. The first being the refinancing of the entire debt facility, resulting in all unamortised expenses relating to the previous Mashreq Bank facility and unwinding costs of the previous EIBOR hedge being fully expensed in the quarter. The second relates to the conclusion of lease negotiations with student accommodation operator, Uninest, which resulted in the partial reversal of income. 

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

“We are pleased to report a stabilised quarter in terms of valuations as market conditions continue to improve after a challenging two years brought about primarily from the Covid-19 pandemic. Our proactive asset management approach to our buildings and capital structure is starting to bear fruit as occupancy levels remain stable across the portfolio and on-going expenses being maintained at record low levels. In December 2021, we finalized the revised lease terms with Uninest resulting in the recommencement of rental payments on this asset. We remain focused on long term cost management despite incurring some one-off expenses related to the refinancing of our facilities which impacted performance in the quarter but improves our cost base significantly going forward. Our liquidity position remains healthy and, coupled with the initiatives we have taken recently, we are well positioned to navigate market conditions as we enter a period of anticipated rising interest rates.”

ENBD REIT’s Loan-to-Value (“LTV”) ratio remained stable at 54%, compared to the previous quarter, as a result of valuations holding over the quarter. 

ABOUT ENBD REIT

ENBD REIT (CEIC) PLC (“ENBD REIT”) is a Shari’a compliant real estate investment trust managed by Emirates NBD Asset Management Limited (the “Fund Manager”), listed on Nasdaq Dubai under ticker ENBDREIT. ENBD REIT is a closed-ended investment company that was incorporated by the Fund Manager to invest in a diversified Portfolio of Shari’a-compliant real estate assets in the UAE. ENBD REIT has an unlimited duration and was established in the DIFC by the Fund Manager on 18 July 2016 under the Companies Law with the name “Emirates Real Estate Fund Limited” and with registration number 2209. The Fund subsequently changed its name to “ENBD REIT (CEIC) Limited” and later ENBD REIT (CEIC) PLC in line with the new DIFC Companies Law. ENBD REIT is categorised under DFSA law and regulations as a Public Fund, a Domestic Fund, an Islamic Fund, a Property Fund and a Real Estate Investment Trust (REIT). ENBD REIT has been established with the main investment objective of generating income returns and capital appreciation from real estate assets. ENBD REIT plans to achieve its objectives through the following strategies: (i) prudent acquisitions with a focus on achieving diversification; and (ii) active asset management and enhancement. 

PORTFOLIO

Office:

Al Thuraya 1 (Dubai Media City)

A G+29-story high rise commercial tower, located at a prime location in Dubai Media City with views over Barsha Heights and Palm Jumeriah.

Burj Daman (DIFC)

Two and a half floors (the fund fully owns the 10th and 14th floors and half of the 15th floor) in the commercial portion of the tower in the DIFC.

DHCC 49 (Dubai Healthcare City)

G+5-story commercial complex located in the Dubai Healthcare City free zone.

DHCC 25 (Dubai Healthcare City)

G+6-story commercial tower located in the Dubai Healthcare City free zone

The Edge Building (Dubai Internet City)

A G+6-story fully leased, prime grade A office building recently constructed and located in the Dubai Internet City free zone. Oracle is the largest tenant occupying 85% of the office space.

Residential:

Arabian Oryx House (Barsha Heights)

A residential tower with 128 units in the free zone Barsha Heights, Dubai. Mainly comprises units of one, two and four-bed apartments. 

Binghatti Terraces (Dubai Silicon Oasis)

A residential tower with 201 residential and 5 retail units in Dubai Silicon Oasis, constructed by developers with an established track record.

Remraam Residential (Dubailand)

Two residential towers offering 105 units in mainly 1 & 2-bedroom apartments

Alternative:

Uninest Dubailand (Dubailand)

A 424-bed student accommodation property located close to Dubai Academic City, serving students attending university across the city. 100% leased to global student accommodation provider, GSA.

South View School (Remraam)

A 132,000 sq. ft. British curriculum primary and secondary school operated by Interstar Education.

Souq Extra Retail Centre Phase 1 (Dubai Silicon Oasis)

Community centre in Dubai Silicon Oasis with over 36,000 ft² of gross leasable area, comprising 25 retail units fully let to blue-chip tenants. 

HIGHLIGHTS*

*All figures are as at 31st December 2021

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