Emirates Reit profit up 2.8% in H1
UAE's first regulated Shariah-compliant trust's net property income rises 6.4%.
Emirates Reit on Monday announced that its net profit increased by 2.8 per cent to $35.11 million (Dh129 million) for the first half of the year, over the same period last year.
The UAE's first regulated Shariah compliant real estate investment trust said that net property income rose 6.4 per cent to $45 million (Dh164 million), while total assets increased by 5.3 per cent in the six months to $626 million (Dh2.3 billion).
Reit paid shareholders a total dividend of $24 million (Dh88 million) for 2014, showing an increase of 60 per cent over the dividend relating to 2013. For the first half of 2015, the annualised total return of the Reit was 16.4 per cent. After payment of the dividend on June 30, 2015, the Reit's net asset value was $1.48 per share. Emirates Reit aims to continue to distribute a dividend to its shareholders twice a year; an interim dividend at the end of January and a final dividend in June. Operationally, the company said, a primary focus over the first six months of the year has been the fit-out and lease of commercial space in Index Tower. In June and July, two floors out of the total of 17 have already been released, fitted-out and furnished. Three additional floors are in the process of being fitted-out and furnished and should be ready for leasing during the 4th quarter of 2015.
In the first half of 2015 the Reit recognised the first significant valuation gain on Index Tower. This asset now represents 43 per cent of the Reit's total asset portfolio by value. "For the coming months we expect to see further capital appreciation as occupancy rates rise, and next year should witness the impact of cash flows reflected in the income stream," the company said.
As expected, in the short term, the effect of Index Tower in the first half of 2015 has been to increase expenses and reduce net rental income margin, compensated by the increase in asset value. The rest of the portfolio has continued to perform well. Occupancy, excluding Index Tower, remained steady at 94.6 per cent. Passing income across the whole portfolio was up 4.8 per cent year on year to $36.8 million (Dh135 million).
Sylvain Vieujot, executive deputy chairman of Emirates Reit Management, said: "We have had a strong first half from an operational and financial perspective and the recent transaction to develop a new school in Akoya and continued progress made at Index Tower maintains our momentum into the second half of the year. The Reit's strategy of active portfolio management and the acquisition of properties with upside potential enables it to consistently deliver a healthy total return."
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