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ENBD Reit posts $215m in Q1 NAV

Dubai - Company maintains healthy blended portfolio occupancy

ENBD Reit, the Shariah-compliant real estate investment trust managed by Emirates NBD Asset Management, said that its net asset value (NAV) for the first quarter stood at $215 million, compared to $230 million for the previous quarter.
The company attributed the decline in NAV to pressure on portfolio valuations, mainly due to soft real estate market conditions and macroeconomic uncertainty around Covid-19.
"A leasing strategy to cater to tenants' needs during the pandemic has helped to partially safeguard occupancy, but has not entirely mitigated the impact of challenging market conditions. As at June 30, blended portfolio occupancy stood at 76 per cent, declining from 82 per cent in the previous quarter," ENBD Reit said.
Anthony Taylor, head of real estate at Emirates NBD Asset Management, said rental income from its portfolio is down on a year-on-year basis, mainly due to the relief measures that we have introduced for struggling tenants, along with lower occupancy in certain office and residential buildings.
"We have, however, been successful in managing down costs, with total expenses reduced by 20 per cent compared to June 30, 2019, due to lower finance costs resulting from refinancing, reduced management fees, and active cost saving initiatives rolled out with service providers across our properties," Taylor said.
The company has taken advantage of a lower interest rate environment to hedge its Shariah-compliant debt facilities, fixing a significant portion of its debt, the Reit's single largest cost, at lower levels for the future. "We are now looking at important upgrades to certain assets, which will support our leasing efforts in 2020 and 2021," he said.
In response to the economic impact of Covid-19, ENBD Reit has been active in seeking solutions for tenants who are in genuine financial distress, thereby bolstering occupancy.

To date, 71 tenants have engaged with management for rent relief, with $2.7 million offered as deferred payments. The impact of the pandemic on cash flow is anticipated to be in the region of four to six per cent of the last financial year's total revenue.
The total dividend paid to shareholders for the year ended 31st March 2020 was $10 million, the company said.
- issacjohn@khaleejtimes.com