Emirates REIT (REIT) Q3 2024 earnings summary

Leadership and strategy update

• Leadership focused on optimizing rental income, strategic asset sales and refinancing expensive debt; strategy prioritizes consolidation and performance over immediate acquisitions.

• Two assets were sold above valuation, reducing LTV to 25.9%; no further near-term asset sales were planned.

• Focus remains on maximizing rental growth, maintaining low leverage and pursuing growth when market conditions are favorable; management was optimistic about 2025.

Portfolio and leasing performance

• Portfolio occupancy reached 92.5%, up 5.2 p.p. YoY; commercial and retail rates increased 10.4% YoY.

• European Business Centre occupancy rose 12.4 p.p. and rates 17.2%; Index Tower occupancy rose 11.8 p.p. and rates 12.7%.

• Q3 leasing included 34 renewals covering 6,742 sq.m., 39 new leases covering 9,608 sq.m. and 21 exits covering 4,284 sq.m.; WALE was 5.6 years.

• The eight-property Dubai portfolio generated 73% of net property income from offices and 27% from education assets; office and education sectors benefit from strong demand and limited supply.

Financial performance

• 9M rental, fee and other income was $62.0m, up 13% YoY; total property income was $62.3m, including a $0.3m realized gain on the TGM disposal.

• Property operating expenses fell 6.4% to $9.0m and net property income rose 17% to $53.3m; operating profit/EBITDA increased 24% to $39.4m.

• 9M profit rose 60% to $148.3m, including a $148.8m unrealized revaluation gain versus $98.0m in 9M 2023; net finance cost increased 7.6% to $39.9m.

• Q3 NAV increased 39% YoY to $648.1m and investment property fair value rose 19% to $1,057.6m.

• 9M FFO was negative $0.5m versus negative $5.4m a year earlier, with higher Sukuk costs contributing to the loss.