ENBD REIT says value of property portfolio is at $456mn for Q3 2018

Results are due to minor valuation losses due to a soft local real estate market

ENBD REIT, the Sharia compliant real estate investment trust managed by Emirates NBD Asset Management Limited, has announced that the value of its property portfolio stands at $456 million for the third quarter ended December 31, 2018, as compared to $459 million registered in the previous quarter.

In a statement, the trust explained that the results were because of minor valuation losses due to a soft local real estate market. The portfolio comprises of diverse holdings totaling 11 properties across office, residential and alternative asset classes, it explained.

Gross yield on the portfolio held steady at 8.3%, following a successful leasing programme across office and residential assets, it said. Meanwhile, occupancy cross the portfolio currently stands at 88%, with a robust Weighted Average Unexpired Lease Term (WUALT) of 3.61 years, the statement continued.

Announcing its net asset value for the third quarter, ENBD REIT said that the NAV stood at $824 million, declining by $1 million on the previous quarter, despite challenging market conditions. It added that it intended to continue the growth and diversification of its portfolio by acquiring income generating assets in Dubai, Abu Dhabi and the Northern Emirates – subject to tenant demand.

As of December 31, 2018, the REIT’s Gross Asset Value (GAV) stood at $461 million compared to $462 million for the previous period with its Loan-to-Value (LTV) ratio remaining at 38%, and gross rental yield on NAV of 13.2%, it added.

“We have experienced minor downward pressure on valuations as a result of market headwinds but are pleased that the impact on both portfolio value and NAV has been muted,” said Anthony Taylor, head of Real Estate at Emirates NBD Asset Management, in the statement.

“This is due to the quality and variety of the assets that we hold, and their ability to consistently generate income. In that regard, our ongoing mission to broaden and diversify our holdings will be of particular importance in 2019. With a competitive financing package recently secured, we are in a good position to deploy funds for acquisitions that meet our investment criteria,” he added.

In November 2018, ENBD REIT secured a competitive financing facility from Standard Chartered Bank, to reduce its cost of borrowing and facilitate plans to acquire new properties that will increase the share of alternative assets within the portfolio.

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