The ENBD REIT portfolio is at 75% plus occupancy, which is quite the achievement given the sizeable office and commercial real estate portfolio it holds. Image Credit: Supplied

Dubai: The Dubai-based real estate fund operator, ENBD REIT, managed to keep the decline in the net asset value of its holdings to 1 per cent to total $174 million for the April to June period of 2021. This compares with $180 million same time last year. (ENBD REIT marks its financial year from April 1.)

Most heartening for the fund managers will be the plus 75 per cent occupancy recorded at its commercial properties as the first signs of a “post-pandemic recovery” show up on the horizon. The gross rental income for the period stood at $7.48 million, declining by 11 per cent from $8.44 million last year.

“Our net rental income and occupancy rates for the first quarter have held up well – the result of active portfolio management,” said Anthony Taylor, Head of Real Estate at ENBD Asset Management. “NAV remains under pressure - our priority in recent quarters has been to ensure stable occupancy, which we have achieved through a range of initiatives, including support for struggling tenants and focusing on asset upgrades.”

The other big positive for the fund is the reduction in expenses, by nearly 17 per cent. This was attained through “renegotiating contracts with service providers” and “lower financing costs from our Shari’a-compliant debt facilities which account for the lion’s share of the REIT’s costs”. There was also a cut in management fees due to a lower NAV.

According to Taylor, "We are looking at new ways to bring further value to existing tenants through a series of strategic upgrades currently in progress. Most notably, at Al Thuraya Tower 1, where we are taking advantage of lower occupancy rates to make significant upgrades to improve the look and feel of the building."

It also completed the sub-division works at Burj Daman to "create units that cater to smaller businesses and corporates looking to downsize, by reducing both costs and office space requirements".

"We continue to take a pragmatic approach to potential asset disposals, with a number of assets in the portfolio being considered for sale, where we believe that fair value can be achieved,” said Taylor.

Dividend payout
Total dividend paid out to shareholders for the year ended March 31, 2021 was $9.25 million, equivalent to 8.6% annualised dividend return of ENBD REIT’s share price.