ENBD REIT announces Q3 NAV of USD 246 million, ahead of proposed restructuring

ENBD REIT (CEIC) PLC (“ENBD REIT” or the “Fund”), the Shari’a compliant real estate investment trust managed by Emirates NBD Asset Management Limited, has announced its Net Asset Value as at 31st December 2019. ENBD REIT’s NAV stands at USD 246 million (USD 0.98 per share) following the dividend payment to shareholders of USD 4.9 million on 17th December 2019, as compared with the previous quarter’s NAV of USD 254 million cum-dividend.

ENBD REIT’s property portfolio value stands at USD 429 million, reducing from USD 435 million in the previous quarter, as a result of valuation losses predominantly in residential holdings, as well as smaller adjustments in the office and retail assets. These valuation losses are attributed to a general softness in the local real estate market. The portfolio comprises diverse holdings totalling 11 properties across office, residential and alternative asset classes. 

Occupancy across the portfolio improved slightly to 81% with a healthy Weighted Average Unexpired Lease Term (“WAULT”) of 3.37 years. As at 31stDecember 2019, the REIT’s Loan-to-Value (“LTV”) ratio stood at 42%, and generated a net rental yield of 4.2% on NAV, or 8.7% on market capitalisation at the prevailing share price.

This week, ENBD REIT published a notice calling for an Extraordinary General Meeting (“EGM”) on 12th February 2020 to seek approval from shareholders to transition to a privately held structure, subject to various other regulatory approvals. The REIT’s management believes that the proposed private structure is better suited for shareholders looking to realise improved returns over a fixed investment horizon.

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

"Whilst market headwinds continued to put pressure on valuations, our proactive leasing strategy across the portfolio resulted in improved occupancy levels, demonstrating the resilience of our assets.  We believe that shifting to a private structure with a limited-term investment horizon is the best strategy to realise value for shareholders and we have now invited our shareholders to vote on the proposed restructuring at the upcoming EGM.”

ENBD REIT intends to maintain the growth and diversification of its portfolio and may still look to acquire income generating assets, using existing available financing, should these assets meet the current acquisition criteria. Assuming the proposed resolutions are passed at the forthcoming EGM, the net proceeds of any future disposals will be passed on to shareholders by way of dividends or a return of capital.