Unlock the secrets behind Emirates REIT’s phenomenal success in FY 2023! Delve into our comprehensive analysis of record-breaking revenues, robust profits, and strategic lease optimization strategies. Discover how Emirates REIT, managed by Equitativa (Dubai) Limited, is revolutionizing the real estate landscape in Dubai with its diversified portfolio of premium properties. If you’re seeking insights into maximizing investment potential and navigating the ever-evolving real estate market, this is a must-read
Unprecedented Growth in Revenue and Profits
Thierry Delvaux, the CEO of Equitativa, expressed his satisfaction with Emirates REIT’s performance, highlighting the significant achievements made throughout the year. He stated, “The past year has been pivotal for Emirates REIT, marked by unparalleled revenues and positive operating profits, underpinned by our strategy focused on optimizing asset performance. With a meticulously curated portfolio comprising high-quality commercial, retail, and educational properties in Dubai, Emirates REIT is poised to capitalize on our robust foundation for further expansion.”
Lease Optimization Strategy Yields Promising Results
Despite the challenges posed by the COVID-19 pandemic, Emirates REIT successfully executed a strategy to secure a substantial number of leases at reduced rates, which are now reaching maturity. Delvaux emphasized that this approach is expected to drive considerable rental growth across the entire portfolio in the coming years as leases are renewed at prevailing market rates.
Financial Performance Overview
Revenue Growth and Operating Profit
Emirates REIT reported a total property income of $74 million for the fiscal year ended December 31, 2023, reflecting a notable increase of 10% compared to the previous year. On a like-for-like basis, excluding the impact of divestments, revenue growth stood at an impressive 13%.
Operating expenses for the properties registered a modest 2% year-over-year uptick. Consequently, net property income surged by 12% to $62 million in FY 2023, compared to $55 million in FY 2022.
Robust Operating Profit and Increased Net Finance Costs
The operating profit for FY 2023 amounted to $44 million, marking a substantial 37% rise from $32 million in FY 2022. However, the net finance cost escalated to $50 million in FY 2023 (compared to $29 million in FY 2022), primarily due to higher Sukuk profit and escalating benchmark rates. This resulted in a negative Funds From Operations (FFO) of $6 million.
Impressive Profit Growth and Asset Valuation
Emirates REIT recorded a profit of $127 million for 2023, indicating a remarkable 55% year-over-year increase from $82 million in FY 2022. The unrealized gain on the revaluation of investment properties amounted to $133 million in FY 2023, compared to $79 million in FY 2022, showcasing the robust performance of the portfolio assets in a thriving real estate market.
Strengthening Financial Position
Significant Increase in Total Assets and Net Asset Value
Total Assets for Emirates REIT surpassed the $1 billion mark, reaching $1,037 million. Meanwhile, Net Asset Value witnessed a substantial 34% surge year over year, culminating at $500 million. This translated into a NAV per share of $1.57, reflecting the growing value of the REIT’s asset base.
Outlook and Future Prospects
Delvaux reiterated the commitment of the asset management team to enhance operational efficiencies across the portfolio, ensuring optimal performance of the assets to deliver superior value to shareholders, tenants, and partners. Despite the impact of high finance costs on FFO, the Finance To Value ratio has improved to a healthy 43%, positioning Emirates REIT for continued growth and value creation.Contact us
