Equitativa (Dubai) Limited, manager of Emirates REIT, on Thursday revealed the impact of the coronavirus pandemic and asset revaluation losses as it reported a total net loss of $244.2 million last year.
The company said in a statement that the financial year 2020 presented unforeseen challenges to the global real estate market, and Dubai was no exception.
Covid-19’s negative impacts were particularly acute on the office and education real estate sectors which are the pillars of the Emirates REIT property portfolio, it added.
Emirates REIT is a Dubai-based real estate investment trust investing principally in income-producing real estate in line with Shari’a principles. It currently owns a portfolio of 11 assets in the commercial, education and retail sector.
Described as a “trying period”, Equitativa said its team focused its efforts on tenant retention and leasing which proved to be effective in delivering on short-term strategic priorities to support its long-term underlying purpose – the curation of a portfolio of real property assets that produce regular revenue.
“The greatest impact of Covid-19 was witnessed on Emirates REIT’s portfolio in October, during which the occupancy and income fell to its lowest point. However, from November, the REIT’s income has begun a market recovery and only increased,” it added.
Emirates REIT’s 2020 full-year results recorded a decrease of 9.7 percent in rental income to $58.2 million, 9.4 percent in total property income to $66 million and 11.3 percent in net property income, while the year witnessed a decrease of 1.3 percent in the portfolio’s total property expenses.
The real estate investment trust manager said it has been proactively responding to market conditions, focusing on operational efficiencies, asset enhancement, and tenant retention.
It signed 97 new leases, totalling approximately 175,560 sq ft and executed 142 lease renewals, totalling more than 289,830 sqft.
Given the challenging real estate market conditions, the fund registered a solid occupancy rate of 69 percent at the end of 2020, it added.
Abdulla Al Hamli, chairman, Equitativa, said: “2020 witnessed unprecedented times, with particular uncertainty and challenges impacting the real estate market worldwide.
“Emirates REIT assets have witnessed a larger than normal drop in valuation due to the high volatility and lack of certainty of the real estate market. We trust that such volatility will recede and that following the decisive actions of the UAE government, the market is already on a fast recovery trajectory.”
Sylvain Vieujot (pictured above), executive deputy chairman and CEO of Equitativa, said: “Despite strong downward pressure on the market, our resilient property portfolio performed well, demonstrating its enduring value with each new and renewed tenant lease.”
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