The manager of Emirates REIT (CEIC) PLC, Equitativa (Dubai) Limited, has released the financial results for Emirates REIT for FY 2023. The REIT saw rapid expansion and record-breaking rental income.
Commenting on Emirates REIT’s 2023 performance, Thierry Delvaux, Chief Executive Officer of Equitativa, said: “The past year represents a major milestone for Emirates REIT, with record revenues and positive operating profits built on a strategy based on asset performance optimization. With a well-managed diversified portfolio of premium commercial, retail, and educational assets in Dubai, Emirates REIT is well-positioned to build on our strong foundations for growth.
We signed a significant number of leases at lower rates during the COVID crisis, which is now coming to maturity. This should yield substantial additional rental growth in the next few years across the entire portfolio, as those are renewed at the current rates.”
Property income for the year ended December 31, 2023, totaled $74 million (FY2022: $67 million), an increase of 10% from the previous year. This growth was 13% on a like-for-like basis, excluding the impact of selling an investment property.
Operating expenses for properties saw a 2% year-over-year increase. As a result, net property income increased by 12% to $62 million in FY 2023 (compared to $55 million in FY 2022).
$44 million was the operating profit, up 37% from $32 million in FY 2022.
The net finance cost for FY 2023 was $50 million (FY 2022: $29 million), impacted by higher Sukuk profit and rising benchmark rates. This led to a $6 million negative Funds From Operations (FFO).
The profit for 2023 was $127 million, up 55% year over year (FY 2022: $82 million).
In FY 2023, the unrealized gain on the revaluation of investment properties was $133 million (compared to $79 million in FY 2022), which is indicative of the portfolio assets’ strong operating performance within a thriving real estate market. The fair value of investment properties grew by 18% year over year to $924 million, primarily due to ongoing improvements in valuations.
Total Assets surpassed $1 billion, reaching $1,037 million, while Net Asset Value increased by 34% year over year to close at $500 million, translating into a NAV per share of $1.57.
Thierry Delvaux continued: “The results reflect the hard work and skill of the asset management team that has raised efficiencies across the board, ensuring that the assets in our portfolio are performing at an optimal level, providing excellent value for our shareholders, tenants, and partners. The FFO was, however, still impacted negatively by the high finance costs. Having peaked at 62% in 2020, the Finance To Value is now down to a healthy 43% (FY 2022 50%), close to the 42% of FY 2017, when the Sukuk was raised.”