The manager of Emirates REIT PLC, Equitativa (Dubai) Limited, announced on Tuesday that net property income for Emirates REIT increased by 16 percent to $34 million in the first half of 2024.
With the help of Dubai’s thriving commercial real estate market, rising occupancy levels, and ongoing lease rate improvements, total property income increased by 12% annually to $40 million for H1 2024 (H1 2023: $36 million). Simultaneously, ongoing rationalization of costs contributed to a 3% decrease in property operating expenses, reaching $6 million (H1 2023: $6.2 million).
Operating profit increased by 19% as a result, ending the first half of the year at $25 million (H1 2023: $21 million).
The real estate investment trust (REIT) is facing significant challenges due to rising financing costs. Despite its strong operating performance, the REIT’s funds from operations (FFO) were negative by $1.5 million in the first half of 2024. However, compared to the negative $3.6 million FFO reported in H1 2023, this represented an improvement year over year.
Due to ongoing improvements in valuations, the fair value of investment properties rose by 18% annually to $991 million. This helped the financing to assets value (“FTV”) drop to 40% as of June 30, 2024, the lowest percentage since 2016.
The robust operating performance of the portfolio in a robust real estate market is reflected in the unrealized gain on the revaluation of investment properties for H1 2024, which came to $65 million (H1 2023: $50 million).
Thierry Delvaux, CEO of Equitativa Dubai, said: “These results demonstrate the important progress we are making towards realizing our strategic vision and delivering enhanced returns for our stakeholders. We have significantly improved operational performance by increasing occupancy levels and raising rates, and continue to deliver efficient cost management, with a special focus on concluding the refinancing plan aimed at strengthening the financial position.”