Emirates REIT (REIT) Q3 2024 TU earnings summary

Leadership and strategy update

• New and experienced leadership team in place, focused on optimizing rental income, strategic asset sales, and refinancing expensive debt.

• Achieved close to 93% occupancy, up from 84% in 2023, through targeted leasing strategies and asset management.

• Sold two assets above valuation, reducing LTV to 25.9% and enabling refinancing of high-cost bonds.

• Emphasis on long-term growth, with current focus on consolidation and performance rather than immediate acquisitions.

• Conservative financial policies with a target LTV of 30% and no plans for further asset sales in the near term.

Portfolio and market performance

• Portfolio consists of eight commercial properties in Dubai, with 73% of net property income from offices and 27% from education assets.

• Weighted average lease term is 6.6 years, with proactive efforts to increase lease duration and tenant retention.

• Office assets benefit from strong demand, limited supply, and sector diversification, supporting rental growth.

• Index Tower, the flagship asset, is positioned in a prime financial district and is achieving high rental rates.

• Education assets are strategically located and benefit from population growth and limited new supply.

Financial performance and outlook

• Q3 2024 total property income rose 13% year-on-year to USD 62.3m, with operating expenses down and net property income up 17% to USD 53.3m.

• EBITDA increased 23% to AED 39.4 million, and operating profit reached USD 39.4m, up 24% from Q3 2023.

• Net asset value rose 39% year-on-year to USD 648.1m, with NAV per share at USD 2.03.

• Profit for the period surged 60% to USD 148.3m, driven by higher asset values and revaluation gains.

• Gross Islamic financing reduced by 40% to AED 253 million by year-end, with finance costs dropping due to lower rates.