Emirates REIT (REIT) H1 2024 earnings summary

Executive summary

• Achieved double-digit income growth and 19% increase in operating profit year-over-year for H1 2024, with total property income up 12% to USD 40.4m and net property income up 16% to USD 34.4m.

• Occupancy rose to 90.5% by mid-year, up 5.1 percentage points, and NAV grew 34% year-over-year to USD 563.2m.

• Portfolio fair value increased 18% to USD 990.8m, reflecting robust market conditions and asset management.

• Funds from Operations (FFO) improved but remained negative at USD -1.5m due to high finance costs.

• Sale of Trident Grand Mall completed above valuation, with proceeds to support Sukuk redemption and reflected post-period.

Financial highlights

• Gross/total property income increased 12% year-over-year to USD 40.4m, with net property income up 16% to USD 34.4m.

• Operating profit grew 19% to USD 25.2m; net profit for H1 2024 was USD 63.5m, a 37% increase.

• Net unrealized gain on revaluation of investment properties reached USD 65.0m, up 30% year-over-year.

• Property operating expenses declined 3.4% to USD 6.0m, with OpEx ratio improving to 15%.

• Net finance cost rose 7.3% to USD 26.7m, representing 66% of total property income.

Outlook and guidance

• Focus remains on enhancing occupancy and rental rates, with further revenue growth expected from lease renewals at higher rates.

• Continued asset dispositions and refinancing efforts planned to lower LTV and support Sukuk redemption.

• Dubai's economic growth forecast at 3.8% for 2024, with low inflation at 2.3% and strong property sector fundamentals.