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WEALTH MANAGEMENT

Emirates REIT now world’s largest listed shari’ah compliant REIT

Emirates REIT now world’s largest listed shari’ah compliant REIT

Total assets is $773 million and market capitalisation is $333 million

IFM Correspondent

November 3, 2016: With a year-on-year increase of 13 per cent in total portfolio value, Emirates REIT (CEIC) Limited, one of UAE’s first regulated shari'ah compliant Real Estate Investment Trusts to be listed on Nasdaq Dubai, is now the largest shari’ah compliant REIT globally, both by total assets and by market capitalisation. The company announced its unaudited financial results on October 31 for the nine-month period ending September 30, 2016.

Highlights

Apart from the total portfolio value, the total property income for the first nine months of 2016 also increased by 22 per cent to reach $36.3 million while the net asset value increased to $1.60 per share, or $480.7 million. As a result of the strong underlying performance during the period, the FFO (funds from operations), or cash profit, increased to $7.8 million (a year-over-year increase of 33 per cent).

Rental growth and conversion into contracted cash flow

In the third quarter of 2016, rental income increased 19.7 per cent to $11.4 million (Q3 2015: $9.5 million) and as on September 30, 2016, the total occupancy rate across the portfolio reached 80 per cent. 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 Index Tower Offices, which stands at 24 per cent (19 per cent including the retail) as on September 30, 2016 (end Q3 2015: 4 per cent) and the leasing of the Jebel Ali School.

Overtakes Singapore entity

Total assets reached $773 million with a market capitalisation of $333 million whilst Sabana Shari'ah Compliant Industrial Real Estate Investment Trust from Singapore, previously the largest listed shari'ah compliant REIT, has S$1.06 billion ($762 million) of total assets (as on September 30, 2016) and has a current market capitalisation of $276 million.

Sylvain Vieujot, Chairman of Equitativa and CEO of Emirates REIT Management, commented: “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'ah compliant REIT in the world is an important milestone as it will increase our international exposure and strengthen our growth and liquidity. This achievement would not have been possible without the vision of the UAE’s leaders who established a stable financial ecosystem with solid laws and regulations that have allowed the United Arab Emirates to become a world leader in Islamic finance. We are proud to be a part of that vision and look forward to continue contributing to further enhance and cement the United Arab Emirates’ position as the global centre for Islamic finance.”

Emirates REIT represents 39% of the total Assets Under Management of the Equitativa Group.


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