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Khaleej Times
15 hours ago
- Business
- Khaleej Times
Emirates Reit reports a strong Q1 2025 with 24% increase in property income
Equitativa (Dubai) Limited, manager of Emirates Reit, on Monday reported a total property income of $19 million in Q1 2025, growing 24 per cent year-on-year on a like-for-like basis. Operational efficiency remained a key driver of performance in Q1 2025, with property operating expenses down 8.4 per cent year-on-year to $3 million. Despite the exclusion of income from divested assets, net property income held steady at $16 million, underscoring the resilience and income-generating strength of the core portfolio. At the same time, net finance costs declined sharply by 57 per cent to $6 million, driven by the successful Sukuk refinancing in late 2024 and reduced financing exposure, directly enhancing earnings and cash flow. The fair value of investment properties rose 14 per cent year-on-year to $1.2 billion (Dh4.0 billion) despite strategic asset disposals. This growth was underpinned by unrealised revaluation gains of $149 million. Portfolio fundamentals remained exceptionally strong, with occupancy reaching 95 per cent, supported by a 17 per cent year-on-year increase in commercial and retail rental rates. Earlier in June, the shareholders of Emirates Reit approved the resolution to distribute a final cash dividend of $7 million or $0.02 per ordinary share, for the financial year ending on 31 December 2024, as well as authorising the Reit manager to allow the payment of another dividend later in the year. 'We executed a two-stage strategy, which saw us first increase occupancy rates, aggressively manage operating costs and boost rental revenue. Then we sold selected assets at a premium in a dynamic market, the proceeds of which enabled full repayment of a bank facility and partial Sukuk settlement, followed by refinancing to provide a leaner and more efficient capital structure. These initiatives equipped us with a resilient platform for sustainable returns, supporting our progressive dividend policy,' Thierry Delvaux, chief executive officer of Equitativa (Dubai), told Khaleej Times after the results were announced. Delvaux believes this is a compelling time to invest in Reits in the UAE, because of the strong economic fundamentals, a maturing real estate sector, and ongoing investor confidence. 'The market has shown resilience, with high occupancy rates and rising rental yields across key segments. Our portfolio's occupancy reached 95 per cent in Q1 2025, with a 17 per cent year-on-year increase in commercial and retail rental rates—clear indicators of a robust leasing environment and strong demand for quality properties. Now that Reits may be exempt from the corporate tax, they will become an even more compelling vehicle for real estate investment in the UAE,' he added. Demand for commercial, educational, and retail space continues to grow, driven by the UAE's strong economic momentum and population growth. Sustainability is also front and center, and energy-efficient buildings are increasingly important to tenants and investors alike. Importantly, the office market continues to be under-supplied and there is room for significant new stock. 'The challenge for Dubai is to incentivise developers to build office assets, which has proven to be difficult. If demand continues to outstrip supply, we are likely to see pre-leasing emerging as the only option for organisations looking to secure future space. However, a surge in the number of pre-lease commitments will further limit availability,' Delvaux said. The Equitativa CEO remains confident about the resilience of both investor and tenant demand, despite ongoing macroeconomic uncertainty. 'Investors are increasingly focused on stable, income-generating assets, and real estate, particularly in high-growth sectors, remains a strong choice,' Delvaux said. On the tenant side, demand continues to rise for premium commercial properties. This reflects a broader market trend where sustainability and quality are becoming key decision drivers. Overall, we see a positive outlook for the year ahead, with strong fundamentals supporting continued growth and long-term value creation across the commercial real estate sector. Emirates Reit is not looking at fractional ownership/tokenisation at the moment. 'Fractional ownership and tokenization are interesting developments, but our current focus is on delivering a stable, efficient, profitable Reit that delivers long-term value to our stakeholders. Tokenization's main objective is to enable retail investors to invest in a fraction of a real estate asset, while a public Reit achieves a similar outcome since anyone can buy shares on the stock market. So, in the future, blockchain-based tokenization could be deployed to make traditionally illiquid real estate investments more accessible and tradable. However, any such consideration would need to align with our strategic objectives and regulatory framework. For now, our priority is to strengthen our portfolio and capital structure to support sustainable growth,' Delvaux said.
Zawya
17 hours ago
- Business
- Zawya
Emirates REIT reports a strong Q1 2025 with 24% increase in property income
Property operating expenses have decreased by 8.4% to USD3 million, driven by further cost optimization initiatives. Occupancy increased by 6% to 95%. Net property income remained stable at USD16 million, despite the absence of income of the properties divested in 2024, which has been compensated by higher rents and occupancy. Sharp Reduction in Finance Costs with Net finance costs decreasing by 57% to USD6 million, thanks to the success of the Sukuk refinancing. Revaluation gain of USD149 million leading to the Total Assets reaching USD1.2 billion, higher than the 1.1 billion in Q1 2024, despite the sale of the two properties. Finance to Value (FTV) improved significantly to 20% from 41% a year earlier, thanks to reimbursement of loans by USD196 million in 2024. Increase of Net Asset Value by +64% year-on-year to USD858 million or USD2.69 per share from USD 525 million (USD1.64 per share) in Q1 2024, setting a new historic record. Dubai, United Arab Emirates – Equitativa (Dubai) Limited ('Equitativa'), manager of Emirates REIT (CEIC) PLC ('Emirates REIT' or the 'REIT'), today reported financial results for the quarter ended 31 March 2025 for Emirates REIT. Total property income was USD 19 million in Q1 2025 growing 24% year-on-year on a like-for-like basis, reflecting the quality of the retained portfolio, even with the REIT having divested two properties from its portfolio – Trident Grand Mall and Office Park – during 2024. Operational efficiency remained a key driver of performance in Q1 2025, with property operating expenses down 8.4% year-on-year to USD 3 million. Despite the exclusion of income from divested assets, net property income held steady at USD 16 million, underscoring the resilience and income-generating strength of the core portfolio. At the same time, net finance costs declined sharply by 57% to USD 6 million, driven by the successful Sukuk refinancing in late 2024 and reduced financing exposure, directly enhancing earnings and cash flow. Reflecting the ongoing momentum in the UAE property sector and the enduring strength of Emirates REIT's high-quality portfolio, the fair value of investment properties rose 14% year-on-year to USD 1.2 billion (AED 4.0 billion) despite strategic asset disposals. This growth was underpinned by unrealised revaluation gains of USD 149 million. Portfolio fundamentals remained exceptionally strong, with occupancy reaching 95%, supported by a 17% year-on-year increase in commercial and retail rental rates. This performance reflects Dubai's robust leasing environment and sustained demand for high-quality real estate, reinforcing Emirates REIT's ability to capture value through active asset management and market positioning. Commenting on Emirates REIT's performance, Thierry Delvaux, CEO of Equitativa Dubai, said: 'At the start of last year, we made a commitment to our shareholders that our efforts would position Emirates REIT on a path for sustained growth, and these results demonstrate how far we have come in achieving this. By reducing financing costs and maximizing returns across our portfolio, we have achieved a leaner and more efficient capital structure for the REIT that will enable us to deliver sustainable returns. We are confident that 2025 will enable us to fully capitalise on our strong position and clear strategy in a dynamic market.' Earlier this month, the shareholders of Emirates REIT approved the resolution to distribute a final cash dividend of USD 7 million or USD 0.02 per ordinary share, for the financial year ending on 31 December 2024, as well as authorising the REIT manager to allow the payment of another dividend later in the year. For further information, including the Q1 2025 Factsheet, please refer to the Investor Relations Page. ABOUT EMIRATES REIT: Emirates REIT, (Nasdaq Dubai: REIT; ISIN: AEDFXA1XE5D7), is a Dubai-based real estate investment trust investing principally in income-producing real estate in line with Shari'a principles. It currently owns a well-balanced portfolio of assets in the commercial, education and retail sector. Emirates REIT benefits from exclusive Ruler's Decrees permitting it to purchase properties in onshore Dubai and Ras Al Khaimah. ABOUT EQUITATIVA GROUP: The Equitativa Group is a leading regional asset manager focused on creating and managing real estate investment trusts (REITs). The group offers innovative risk-adjusted, income generating financial products that cater to institutional and retail investors. As the founder of the UAE's first Shari'a compliant REIT, Emirates REIT, Equitativa is today one of the largest REIT managers in the Gulf Cooperation Council (GCC) countries and one of the biggest REIT managers for Shari'a Compliant REITs in the world
