Dubai – Mubasher: Emirates REIT on Monday reported a year-on-year 21% growth in its rental income to $12.6 million in the first quarter of 2017, up from $10.4 million in the year-ago period.
The increase “primarily reflects stronger leasing at Index Tower, income from Jebel Ali School, and the first rental payments from British Columbia Canadian School,” the company said in a statement.
Total occupancy across Emirates REIT’s portfolio reached 81% in the first three months of the year, while the weighted average unexpired lease term was up to 8.0 years compared to 6.4 years in Q1-16.
The UAE-based REIT was able to convert most of its additional rental income to funds from operations (FFO), resulting in a 90% surge in FFO, or around $4.2 million in cash profit in Q1-17, compared to $2.2 million in the corresponding period of 2016.
“The pace of leasing at Index Tower picked up during Q1-17, following increased marketing across a wider range of brokers that resulted in signing 20 new office leases. Office Park in Dubai Internet City saw an active period of leasing with the renewal of nearly all leases, demonstrating the value tenants continue to see in the quality of the building and in its strong location,” Emirates REIT highlighted.
The total value of the UAE portfolio by 31 March 2017 was $763.5 million, registering a year-on-year increase of 10% from $692.2 million in Q1-16.
Meanwhile, the net asset value increased to $1.64 per share, or $490.5 million, in Q1-17 from $1.57 per share, or $472 million, in Q1-16, according to the statement.
“The REIT benefited from Equitativa’s portfolio management strategy, which includes fitting out and upgrading commercial properties, as well as developing schools,” the statement showed.
Equitativa’s hands-on property management and proactive tenant management has continued to improve the financial performance of Emirates REIT’s existing portfolio, which in turn helped enhance “the flow-through of income to FFO,” it added.
