Emirates Reit rising rent income defies slow commercial market

Rental income from the ­Dubai offices, shops and schools owned by Emirates Reit jumped by more than 25 per cent in the second quarter of the year as occupancy levels rose despite a slowing commercial property market.

The UAE’s only quoted real estate investment trust reported that the income it received from its portfolio of eight Dubai-based properties rose to US$10.6 million in the three months to the end of June, 28 per cent higher than for the same period a year earlier, when it stood at $8.2m.

Emirates Reit said that total occupancy across its portfolio, 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 increased to 77 per cent at the end of June from 67 per cent a year ago.

The company said that occupancy levels at its biggest asset, the Index Tower complex in ­Dubai, increased to 16.3 per cent from being completely empty the previous year.

However, second-quarter profit at the Nasdaq Dubai-quoted real estate trust fell more than 63 per cent to $9.4m, down from the $26m it made during the same period a year earlier.

Emirates Reit said this was because its property portfolio had not increased in value as quickly as it did the previous year. Unrealised revaluation gains on its portfolio of investment properties fell 40 per cent to $18.8m from $31.5m.

“This is an indication that the portfolio has shifted from booking valuation gains to booking rental income,” Sylvain Vieujot, the chief executive of the reit manager, told The National. “The key reason why you get valuation gains is on the expectation of rental income.”

The company reported that the total value of its portfolio at the end of June grew by 7.2 per cent to $721.9m, from $673.2m a year earlier.

At the same time total debt at the company increased by 6.8 per cent to $274.7m, from 257.2m a year ago as it made additional funds available for acquisitions. Fin­ance costs nearly doubled, growing in the first half of the year to $4.2m from $2.8m.

lbarnard@thenational.ae

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