Emirates REIT acquires European Business Centre for Dh130m

Emirates REIT on Wednesday announced that it has signed the acquisition of the European Business Centre (EBC) in Dubai Investments Park at a purchase price of Dh130 million.
Emirates REIT expects the transaction to generate an estimated IRR in excess of 10 per cent. Following completion of the acquisition, Emirates REIT's total portfolio will cross Dh3 billion, comprising 10 properties across Dubai. The acquisition of EBC is Emirates REIT's second transaction in Dubai Investments Park. In September 2016, the REIT secured a lease on a 270,000sqf plot of land, on which it is building the British Columbia Canadian School.
The European Business Centre is a ground plus three storey commercial building with a net leasable area in excess of 273,164sqf. It has a current occupancy rate of 87 per cent and a current passing income in excess of Dh20 million. The building comprises 101 corporate tenants, including: Stantec International Inc, UBC Businessmen Service, and the German Emirati Business Centre.
Sylvain Vieujot, CEO of Equitativa Dubai, the REIT manager, said: "This is a prime commercial asset in Dubai Investments Park, secured at an exceptional price of Dh476 per square foot. Upon completion of the transaction, the building will immediately enhance the REIT's cash flow and over the longer-term we expect significant capital appreciation, especially following the completion of the adjacent metro station."
Emirates REIT also reported a 31 per cent rise in net rental income and a 67 per cent growth in funds from operations in the first half of 2017. The company also saw rental income grow 22 per cent to $25.4 million in the first half of the year, while service fees and other income rose six per cent to $2.8 million, leading to $28.3 million in property income generated in H1, 2017.
The total portfolio value as of June 30, 2017 was $772.1 million, a year-on-year increase of 6.9 per cent. The net asset value was $1.63 per share, or $487.8 million. Valuation gains on the total portfolio in H1, 2017 were $10 million.
- business@khaleejtimes.com