Emirates REIT Strong Q1 2025: 24% Property Income Surge

Equitativa (Dubai) Limited, the manager of Emirates REIT (CEIC) PLC, has announced the financial results for Emirates REIT for the first quarter ending 31 March 2025. The report showcases a robust start to the year, despite a leaner portfolio following strategic asset sales.

Significant Growth in Property Income Despite Asset Divestments

During the first quarter of 2025, Emirates REIT recorded a total property income of USD 19 million. This marks a 24% increase year-on-year on a like-for-like basis, a performance that stands out considering the REIT had divested two properties, Trident Grand Mall and Office Park, in 2024. The strong revenue growth is attributed to the strength and quality of the retained asset portfolio.

Enhanced Operational Efficiency and Stable Core Income

Operational performance saw marked improvement in the quarter, with property operating expenses declining by 8.4% year-on-year to USD 3 million. Even in the absence of income from the sold assets, net property income remained firm at USD 16 million. This resilience highlights the income-generating capacity of the REIT’s core properties and the effectiveness of its operational strategy.

Lower Finance Costs Support Earnings and Liquidity

A substantial reduction in net finance costs also contributed to the positive financial outlook. Net finance costs fell by 57% year-on-year to USD 6 million, largely due to the successful refinancing of the Sukuk in late 2024 and a more conservative financing structure. These changes have had a direct and favourable impact on both profitability and cash flow.

Portfolio Value Rises on Strong Market Momentum

The UAE’s buoyant real estate market continued to lend strength to Emirates REIT’s performance. The fair value of investment properties increased by 14% year-on-year to USD 1.2 billion (AED 4.0 billion), despite the strategic reduction in the number of assets. This appreciation was primarily driven by unrealised revaluation gains amounting to USD 149 million, reflecting favourable market conditions and the quality of the REIT’s holdings.

Occupancy and Rental Rates Reflect Market Demand

Portfolio occupancy levels remained high, reaching 95% by the end of Q1 2025. This figure was further bolstered by a 17% year-on-year rise in rental rates across commercial and retail properties. The performance underscores strong leasing activity in Dubai and sustained demand for premium real estate offerings. Emirates REIT continues to capitalize on these trends through strategic asset management and strong market positioning.

Commenting on Emirates REIT’s performance, Thierry Delvaux, CEO of Equitativa Dubai, said: “At the start of last year, we made a commitment to our shareholders that our efforts would position Emirates REIT on a path for sustained growth, and these results demonstrate how far we have come in achieving this. By reducing financing costs and maximizing returns across our portfolio, we have achieved a leaner and more efficient capital structure for the REIT that will enable us to deliver sustainable returns. We are confident that 2025 will enable us to fully capitalise on our strong position and clear strategy in a dynamic market.”

Dividend Distribution Signals Confidence in Outlook

Earlier in June, shareholders of Emirates REIT approved a final cash dividend of USD 7 million, equivalent to USD 0.02 per ordinary share, for the financial year ending 31 December 2024. In addition, they authorized the REIT manager to consider a second dividend payout later in the year. This decision reflects management’s confidence in the REIT’s earnings stability and long-term performance trajectory.