ENBD REIT’s share value decreased 17 percent against the previous year, the Shari’a compliant real estate investment trust managed by Emirates NBD Asset Management Limited, revealed in their financial year-end results.
The company’s property portfolio stands at $360 million and net asset value equals $180m, or $0.72 per share, according to the results released Sunday.
ENBD REIT has revised its valuation policy for the financial year 2021-2022 onwards. The REIT will conduct a tender process from a pre-qualified list of valuers ahead of its next valuation cycle.
“Downward movement on valuations was driven by the dual pressures of a softening real estate market and pandemic-induced economic pressures that affected gross rental income,” the statement said. “Occupancy in the portfolio remained healthy, with management providing a range of solutions to support tenants in genuine financial distress in order to secure income.”
ENBD REIT’s board of directors has proposed a final dividend of $4,400,000 or $0.0176 per share – equivalent to 2.44 percent of net asset value and 4.10 percent of the share price – for the six-month period ending March 31, 2021, subject to shareholder approval at the annual general meeting.
“The 2020-21 financial year was challenging, with soft market conditions exacerbated by the Covid-19 pandemic,” said Anthony Taylor, head of real estate at Emirates NBD Asset Management. “During the year, we sought to safeguard occupancy rates to limit downward movement on rental income, while reducing fund and operating expenses throughout the portfolio. While occupancy rates were affected by a sustained softening of the real estate market and weak economic indicators, blended occupancy in the portfolio remained healthy, which can be attributed to our active and flexible leasing strategy.”
Anthony Taylor, head of real estate at Emirates NBD Asset Management
The company is off-target for the dividend for financial year 2020-21 for normal market conditions, and the improved dividend yield is a result of a discount to net asset value on the share price.
ENBD REIT intends to continue paying dividends on a semi-annual basis.
The company renewed Oracle at the Edge building, the company’s largest tenant, for another five-year term.
“This agile approach to leasing and cost management has seen net rental income from the portfolio increase 8 percent year-on-year, excluding valuation movements,” Taylor said.
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