Dubai property fund Emirates REIT swings back into profit in Q1-2021
Improved leasing and gains on property values help with recovery
Dubai: After a horrific Dh897 million loss for 2020, the Dubai property fund Emirates REIT is showing some signs of a turnaround with a net profit of Dh131.5 million in the first three months. This compares with a Dh170.1 million loss same time last year.
The improvements were brought on through gains from leasing, as well as on the values of its property portfolio. The fair value of its investment properties was up 5.5 per cent to Dh2.67 billion compared with the Dh2.53 billion at the end of 2020. (Property values in Dubai are seeing selective gains, especially in the top end of the market.)
The Emirates REIT fund manager Equitativa also managed to lower operating expenses. Net property income was down 11.9 per cent to Dh43 million from a year ago, but was up 2.6 per cent from the fourth quarter of 2020.
"While 2020 proved to be one of the most demanding periods for commercial real estate, Emirates REIT has continued to navigate these challenging market conditions and started 2021 with improving operating and financial momentum," said Sylvain Vieujot, Executive Deputy Chairman of Equitativa. "From the end of 2020 we have seen renewed growth in net property income and EBITDA whilst also maintaining a 69 per cent occupancy rate across the REIT’s portfolio.
"The fair value of our investment properties also increased 5.5 per cent, reflecting the improving commercial real estate market in the UAE." This rebound in market sentiment was reflected in the recent sale of half of a shell and core office floor in Index Tower at a rate of AED 3,350 per sq ft that will be accounted for in Q2.