Emirates Reit property portfolio holds steady even as Dubai values fall

The value of the Emirates Reit property portfolio remained at US$753 million at the end of February, despite widespread declines in values on the Dubai property market.

In a monthly update Emirates Reit, the UAE’s first listed real estate investment trust, announced that the portfolio’s value remained the same as a month earlier and had increased 1.5 per cent since the end of October when it was valued at $742m.

Emirates Reit said that the value of its portfolio of eight commercial buildings and schools in Dubai is updated at least every six months by valuers Asteco and CBRE.

The Reit said that the net asset value of the fund was $484m at the end of February, down from $493m at the end of January, but that was before the company paid out an interim dividend of 4 US cents per share.

Last month Emirates Reit reported a 22 per cent fall in profit for 2016 to $47.8m compared with $61.5m a year earlier, mainly because gains in the value of its property portfolio were not as high in 2015.

Overall, the company recorded a 22 per cent increase in total income from its property portfolio to $50.7m versus $41.5m in 2015, with rental income up by 23 per cent to $45.3m.

According to Cluttons, rents fell in 15 out of the 23 Dubai office submarkets during the second half of 2016 and only increased in the DIFC and Dubai Design District.

However, the property slump appears to be doing little to deter new Reits from entering the market.

Last month Emirates Reit’s fund manager Equitativa said it was gearing up to launch the UAE’s first residential Reit and had plans to set up more Reits based around hotels, logistics and sporting assets.

And last week Emirates NBD Asset Management floated the UAE’s second listed Reit on Nasdaq Dubai, saying that it expected many more to follow suit across the region.

ENBD Reit said it also expected to face increasing competition from new Reits based in Saudi Arabia, which are allowed to invest up to 25 per cent of their total asset value outside the kingdom.

Yesterday, Jadwa Investment Company announced plans to list a third Saudi Reit.

Jadwa Reit Alharamain Fund said it expected to raise 660 million riyals (Dh646.3m) from retail investors before listing its units on the Saudi exchange by mid-April.


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