Trust becomes world’s largest listed Sharia compliant body of its kind, with total portfolio of $742m
Emirates REIT Limited (REIT), the UAE’s first regulated Sharia-compliant Real Estate Investment Trust listed on Nasdaq Dubai, has reported strong growth in its unaudited results for the first nine months of the year, making it the world’s largest listed Sharia compliant trust both by total asset value and market capitalisation.
The trust said in a statement that its total portfolio value stood at $742 million, a year-on-year increase of $85m or 13%. Cash profit or funds from operations (FFO) increased to $7.8m, a year-on-year rise of 33%, which the company attributed to the strong underlying performance in the first nine months of 2016. The total property income for the nine months also increased 22% to $36.3m from the $29.8m recorded at the same time last year. Net asset value increased to $1.60 per share, or a total of $480.7m. Total debt at the end of Q3 2016 was $269m, which translates into a Loan to Value (LTV) ratio of 35%.
The statement added that in the third quarter 2016, rental income increased 19.7% to $11.4m with the total occupancy rate across the portfolio reaching 80% as of September 30. The weighted average lease expiry of the total portfolio was 8.5 years. The increase in property income is mostly attributable to the leasing of the Jebel Ali School and the Index Tower Offices which stood at 24% as on September 30.
Sylvain Vieujot, chairman of the trust’s parent company, Equitativa Real Estate Limited, and CEO of Emirates REIT Management, said: “Emirates REIT continues to record strong growth in cash flow, which should persist as occupancy increases and the portfolio grows. Becoming the largest listed Shari’a compliant REIT in the world is an important milestone as it will increase our international exposure and strengthen our growth and liquidity.”
During the period, the development of the new Jebel Ali School campus was completed on time and within budget. The property, located in the Akoya development in Dubailand, saw an 18.3% post completion valuation gain of $12.8 million, the statement added.
Following a similar model, the REIT launched another school development, with the acquisition of a leasehold plot in Dubai Investments Park. The overall investment is estimated to be $24m. As at September 30, the education sector represented 28% of the REIT’s portfolio income, said the statement.
Just after the period end, Equitativa was granted an exclusive Emiri Decree in Ras Al Khaimah, allowing trusts managed by the company to acquire property in the emirate. This Decree directly benefits Emirates REIT, by enlarging its acquisition pool to projects in Ras Al Khaimah, the company added.