ENBD REIT (CEIC) Limited (“ENBD REIT”), the Shari’a compliant real estate investment trust managed by Emirates NBD Asset Management Limited, has announced its Net Asset Value for the 6-month period ended 30th September 2018. ENBD REIT’s NAV stood at USD 285 million (USD 1.12 per share), compared with USD 289 million in the previous quarter, as a result of valuation losses driven by soft real estate market conditions. The Board of Directors has proposed to pay an interim dividend of USD 0.0270 per share from the net rental income generated during the period, subject to approval by shareholders of a Reduction of Capital at the General Meeting on 27th November 2018.

ENBD REIT’s property portfolio value stands at USD 459 million as at 30th September 2018, with diverse holdings totalling 11 properties across office, residential and alternative real estate sectors. Gross yield on the portfolio held steady on the full year period ended 31st March 2018, at 8.3%, following successful efforts to lease units in the office and residential portfolio. Funds from operations for the 6-month period were USD 6.9 million, up 42% on H1 2017/2018. Occupancy across the portfolio remains strong at 90%.

ENBD REIT’s proposed interim dividend of USD 0.0270 per share will be paid in December 2018, subject to shareholder approval of a Reduction of Capital at the upcoming General Meeting, to be held on 27th November 2018. The proposed dividend payment will total USD 6.9 million and equates to a yield of 4.82% on NAV per share. ENBD REIT also announced its intention to commence a share buyback programme, also subject to the passing of the Special Resolution concerning the Reduction of Capital, as well as the relevant regulatory approvals. The programme is part of ENBD REIT’s commitment to adding value to shareholders holding stock at current discounted levels and aims to positively impact liquidity.

Anthony Taylor, Head of Real Estate at Emirates NBD Asset Management, said:

"While our NAV has come under pressure due to valuation losses resulting from challenging market conditions, these results reflect our success in safeguarding income from the portfolio. Gross yield remains stable, and we have achieved an annualized net yield on NAV of 4.89%, which is a 13% increase on the previous year.

Meanwhile, we continue to explore solutions for adding value to shareholders. We are ready to launch a share buyback programme, and the proposed capital reduction, if passed, will create a distributable reserve that will enable us to consistently deliver dividend income to shareholders from rental income received, regardless of market headwinds and movements in valuations.”

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

ENBD REIT intends to maintain the growth and diversification of its portfolio, by acquiring income generating assets in Dubai, Abu Dhabi and the Northern Emirates – subject to tenant demand. ENBD REIT's Gross Asset Value (GAV) stood at USD 462 million for the period ended 30th September 2018, with a Loan-to-Value (LTV) ratio of 38%, and gross rental yield on NAV of 13.2%.


Source: Instinctif Partners