Emirates REIT H1 2024 Operating Profit Up 19% Year-Over-Year

Equitativa (Dubai) Limited, the management company for Emirates REIT PLC, announced on Tuesday that the real estate investment trust (REIT) achieved a notable increase in net property income for the first half of 2024. Net property income rose by 16% to $34 million, reflecting strong performance in a buoyant commercial real estate market in Dubai.

For the first half of 2024, total property income surged by 12% year-on-year to reach $40 million, compared to $36 million in the same period of 2023. This growth was supported by higher occupancy levels and ongoing improvements in lease rates. Concurrently, the REIT successfully reduced property operating expenses by 3%, which amounted to $6 million, down from $6.2 million in H1 2023.

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As a result of these favorable developments, operating profit increased by 19%, totaling $25 million for H1 2024, up from $21 million in the first half of 2023.

Despite the positive operational results, the REIT is grappling with rising financing costs, which have impacted its funds from operations (FFO). For the first half of 2024, FFO were negative at $1.5 million. This represents an improvement from the negative $3.6 million reported in the same period last year.

The fair value of investment properties saw an 18% annual increase, reaching $991 million. This appreciation in property values contributed to a decrease in the financing-to-assets value (FTV) ratio to 40% as of June 30, 2024, the lowest level since 2016.

The strong operating performance and favorable market conditions were further reflected in an unrealized gain of $65 million from the revaluation of investment properties for H1 2024, compared to $50 million in the previous year.

Thierry Delvaux, CEO of Equitativa Dubai, commented on the results: “These figures illustrate the significant progress we are making towards our strategic goals and our commitment to enhancing returns for our stakeholders. We have achieved substantial improvements in operational performance, driven by increased occupancy and higher lease rates, and have maintained effective cost management. Our focus now shifts to finalizing our refinancing strategy to further strengthen our financial position.”