‘Challenging’ real estate market conditions put pressure on Emirates NBD REIT’s net asset value

Dubai real estate investment trust ENBD REIT has posted a decline in net asset value and occupancy rate in its portfolio due to “challenging” conditions in the real estate market. 

The trust managed by Emirates NBD Asset Management Limited achieved a net asset value of $174 million for the quarter ended June 30, 2021, down by 1 percent from $180 million from the previous quarter. 

ENBD REIT’s portfolio includes several properties in the office, residential and alternative sectors. As of June 2021, occupancy rates in its assets also fell to 75 percent from 76 percent in the previous quarter.  

“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,” said Anthony Taylor, head of real estate at Emirates NBD Asset Management, in a statement to Nasdaq. 

He maintained that the occupancy rate and rental yields in their portfolio remain stable, thanks to the company’s “active” leasing strategy. 

“In light of adverse conditions, our net rental income and occupancy rates for the quarter have held up well – the result of active portfolio management,” he said. 

The company has managed to reduce its total expenses by almost 17 percent compared to June 30, 2020. This was achieved by renegotiating contracts with service providers, lowering financing costs from debt facilities that account for the lion’s share of the REIT’s costs and reducing management fees. 

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“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,” the statement said. 

(Reporting by Cleofe Maceda; editing by Seban Scaria) 


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