ENBD Reit posts $270m net asset value and proposes dividend

Nasdaq-listed reit plans to expand its portfolio further with new acquisitions

An ariel view shows the Burj Khalifa, the world's tallest tower, dominating the Dubai skyline on April 10, 2016.
For more than 10 years Dubai property prices have been on a roller coaster, creating and wiping out fortunes, but recently they appear to have run out of steam.


ENBD Reit, the Sharia-compliant real estate investment trust managed by Emirates NBD Asset Management, said its net asset value for the year ending March 31 declined to $270 million though revenue increased.

Net asset value was down 10 per cent from the same month in 2018, according to the previous year’s results carried on the company’s website. However, rental income bucked trends across the UAE real estate sector improving by more than $5m year-on-year, a company official said in a statement on Wednesday.

“While local real estate market headwinds have put pressure on property valuations, our performance indicates that the portfolio’s rental income is resilient,” said Anthony Taylor, head of real estate at Emirates NBD Asset Management.

“This is borne out by the fact that the total property portfolio value has reduced by only 2.8 per cent [year-on-year] – outperforming market trends across real estate asset classes – with average occupancy robust at 86 per cent and rental income improving by more than $5m year-on-year.”

ENBD’s total portfolio value fell 2.8 per cent to $450m in the period. Total loans this year stood at $180m, at a loan to value ratio of 40 per cent, and average portfolio occupancy stood at 86 per cent.

The Nasdaq Dubai-listed Reit said in February it plans to expand its remit outside Dubai, targeting Abu Dhabi and the northern emirates, and investments specifically in the industrial and healthcare sectors.

“The diversity that we have established in the portfolio has been instrumental for mitigating valuation risk, which is why we are seeking further growth in our holdings, in particular for alternative assets secured with long-term lease agreements,” Mr Taylor said on Wednesday.

ENBD Reit’s board of directors proposed a final dividend of $5.4m, or 0.0215 per share – equivalent to 2 per cent of net asset value and 3.81 per cent of the share price. This is subject to approval by shareholders at the annual general meeting on June 24.

The proposed dividend is equivalent to the net rental income generated by ENBD Reit’s portfolio, “despite movements in valuation experienced during the period”, the company said.

The total dividend payable to shareholders for the year ended March 31 is $12.3m, equivalent to 4.54 per cent of the share price. An interim dividend of $6.9m ($0.0270 per share) was paid to shareholders for the six months ended September 30, 2018 Reit intends to continue paying dividends on a semi-annual basis, the statement said.