First-quarter profit at the UAE’s only quoted real estate investment trust, Emirates Reit, rose by more than half as the company netted rents from newly refurbished floors at Index Tower and its currently under-construction school in Akoya.
In a company filing to Nasdaq Dubai, Emirates Reit reported that net profit for the first three months of this year stood at US$14.3 million – up 57.8 per cent from the $9.1m it reported a year earlier.
The trust said that income from renting out its portfolio of offices, shops and schools in Dubai rose by 18.9 per cent to $8.1m, mainly because of new lettings at its Index Tower office block and income from pre-letting its 20,800 square metres Jebel Ali school in Akoya.
The company also said it benefited from a 5 per cent year-on-year rental growth across its portfolio of eight properties in Dubai, which includes Le Grande Community Mall in Dubai Marina, Gems World Academy in Al Barsha South, the Office Park commercial building in Knowledge Village, as well as a cluster of three loft offices in Media City.
The company said that occupancy across its portfolio stood at 77.4 per cent, up from 66 per cent last year, as it continued to fit out and lease out floors it had acquired at Index Tower.
Emirates Reit said that the total value of its portfolio increased over the quarter by 2.8 per cent to $692.2m. It said this was driven by progress made on the Jebel Ali school development and the continued fit-out work at Index Tower. As a result, revaluation gains for the quarter amounted to $12.1m.
Finance costs also grew by 64.8 per cent to $2.3m from $1.4m a year ago, after the company increased its borrowings to capitalise on a recent softening in the Dubai market.
Emirates Reit said its outstanding debt at the end of the first quarter was $251.5m, representing a debt-to-equity ratio of 34.1 per cent, slightly lower than the same period a year earlier, after the company made $5.9m of principal repayments during the quarter.
“During the first quarter we have generated a solid pipeline of tenants and closed new broker agreements to accelerate the rental process going forward,” said Sylvain Vieujot, the Emirates Reit chief executive. “We continue to monitor the market for acquisitions in line with our overall strategy.”
Emirates Reit was created in the 2010 trough of the Dubai property market and became the first Sharia-compliant Reit to be incorporated at the Dubai International Financial Centre. Its first purchase was Building 24 in Dubai Internet City.
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