Emirates REIT Delivers Strong 19% H1 Profit Growth

Equitativa (Dubai) Limited (“Equitativa”), the manager of Emirates REIT (CEIC) PLC (“Emirates REIT” or the “REIT”), has announced its financial results for the half year ending on June 30, 2024.

Growth in Property Income

Emirates REIT saw a 12% year-on-year increase in total property income, reaching $40 million in H1 2024, up from $36 million in H1 2023. This growth was fuelled by higher occupancy levels and improved lease rates, supported by Dubai's strong commercial property market.

Reduction in Operating Expenses

Cost rationalization efforts led to a 3% reduction in property operating expenses, which decreased to $6.0 million in H1 2024 from $6.2 million in H1 2023.

As a result of increased income and reduced expenses, net property income rose by 16%, reaching $34 million in H1 2024, compared to $30 million in H1 2023. Operating profit also grew by 19%, closing at $25 million in H1 2024, up from $21 million in the same period the previous year.

Challenge of Rising Finance Costs

Despite strong operating performance, rising finance costs continued to challenge the REIT, resulting in a negative Funds From Operations (FFO) of $1.5 million in H1 2024. However, this was an improvement from the negative $3.6 million FFO reported in H1 2023.

Increase in Property Valuations

The fair value of investment properties increased by 18% year-on-year to $991 million, driven by improved valuations. This increase helped the Financing To Assets Value (FTV) ratio drop to 40% as of June 30, 2024, its lowest level since 2016.

Gains on Property Revaluation

The unrealized gain on the revaluation of investment properties for H1 2024 amounted to $65 million, up from $50 million in H1 2023, reflecting the robust performance of Emirates REIT's portfolio in a thriving real estate market.

Thierry Delvaux, CEO of Equitativa Dubai, said: “These results demonstrate the important progress we are making towards realising our strategic vision and delivering enhanced returns for our stakeholders. We have significantly improved operational performance by increasing occupancy levels and raising rates, and continue to deliver efficient cost management, with a special focus on concluding the refinancing plan aimed at strengthening the financial position.”