Emirates REIT, the world's largest Shari'a-compliant REIT, posted a 27 per cent EBITDA growth to $17.8 million during the first half of this year.

 

Releasing the company’s unaudited first-half financial results for the period, Equitativa, the largest REIT manager in the GCC and manager of Emirates REIT (CEIC), said the property income grew by 20 per cent to a total of $33.8 million for the six months period (H1 2017: $28.3 million). Property expenses, like for like, were reduced by 20 per cent. 

 

The robust property operating income conversion to bottom line led to a 27 per cent growth in EBITDA to $17.8 million (H1 2017: $14 million) reflecting the highest level on record for a quarter in Q2 at $9.3 million (Q1 2018: $8.5 million), a statement said.

 

In Q2, the Funds from Operations (FFO) recovered from Q1 with 20 per cent growth quarter-on-quarter to $4.2 million (Q1 2018: $3.5m) reducing the H1 2018 variance to 7 per cent (H1 2018: $ 7.7m versus H1 2017: $8.3m).

 

The property income growth was primarily driven by the acquisition of the Lycée Français Jean Mermoz, and of the European Business Centre, along with the increase in the leasing of office units at Index Tower and retail outlets at Trident Grande Mall, it said.

 

The Net Asset Value at the end of the period was at $1.76 per share, or $526.5 million, with a total year-on-year return of 12.8 per cent, including the two dividend distributions totalling 8 cents per share ($24 million), which were paid in January and June 2018. This is compared to $1.63 per share or $487.8 million in the first half of 2017.

 

The value of the REIT portfolio also increased to $913.6 million, marking an increase of 18.3 per cent compared to $772.1 million at the same time last year.

 

Equitativa has expanded the education portfolio of the REIT by acquiring the Lycée Français Jean Mermoz in May for $20.5 million. The school operating a French curriculum has been leased back immediately for a period of 27 years, and the transaction is set to generate an estimated Internal Rate of Return (IRR) of over 12 per cent.

 

Index Mall is reaching completion and is set to open ahead of the Gate Avenue. Tenants have started the fit-out process for the retail and F&B outlets ahead of the upcoming opening.

 

Sylvain Vieujot, group chairman of Equitativa, commented: "These results reflect the highest quarterly EBITDA growth on record to date for Emirates REIT. It is the result of robust property income and continuous optimisation of our operating costs. We are confident that Emirates REIT’s portfolio is well-placed to continue to deliver strong, sustainable long-term returns, and we are looking forward to new upcoming investment opportunities." – TradeArabia News Service