November 11, 2021

Equitativa swings to $49m net profit in Q3

categories : real estate

Equitativa (Dubai), the largest real estate investment trust manager in GCC and also manager of Emirates REIT (CEIC), today (November 10) reported a net profit of $49.3 million for the third quarter compared to a net loss of $94.5 million last year.

Announcing the unaudited Q3 and YTD 2021 financial results for Emirates REIT, Equitativa said the REIT continues to see positive momentum as Dubai’s real estate market recovers from the impact of the Covid-19 pandemic.

In the nine months ended September 30, the company reported a 65.7% increase in ebitda to $38 million,

compared to nine months period ended September 30 2020. Net profit for the period was $49.3 million, compared to a net loss of $94.5 million for the same period in 2020.

Occupancy across the REIT’s portfolio grew by 2.3% year-on-year and stood at 71% as at 30 September 2021, with an increase of 6.6% in the number of tenants, from 301 tenants in Q3 2020 to 321 tenants in Q3 2021.

During Q3 2021, the REIT signed 31 new leases for 47,000 sq ft and renewed 28 leases for 40,000 sq ft, with seven leases expiring for 12,000 sq ft.

Equitativa's focus on operational excellence enabled a strong tenant retention of 80% of the leases (77% by areas).

Through the ongoing proactive management of its portfolio, the REIT maintained a stable Weighted Average Unexpired Lease Term (WAULT) across the portfolio of 8.5 years. Occupancy in the REIT’s largest asset, Index Tower in DIFC, increased year-on-year by 13.7% to reach 60.3% as at 30 September 2021, taking into account the divestment of half floor in Q2.

Total property income for the latest nine-month period increased 3.1% year-on-year to $52.2 million.

Total property expenses during the first nine months of 2021 declined 3.8% to $9.7 million, compared to the same period a year earlier, as the REIT continued to focus on cost optimisation. Fund expenses for the same period declined 11.2% year-on-year.

The REIT booked a net reversal on expected credit losses amounting to $6.5 million in the first nine months of 2021, compared to a charge of $5.3 million for the same period in 2020, mainly as a result of a partial recovery from one of its tenants.

Fair Value of Investment Property appreciated by 4.8% during the first nine months of 2021 to reach $723.4 million, compared to $690.3 million as of December 31, 2020, resulting in an unrealized fair value gain of $32.4 million for the period.

NAV per share increased by 22% during the period, closing at $0.91 per share, up from $0.74, as at 31 December 2020.

On the Emirates REIT’s Q3 2021 performance, Sylvain Vieujot, Executive Deputy Chairman of Equitativa, said: 'Our results for the period reflect the returning confidence and ongoing positive momentum in the UAE’s real estate market as the economy continues to recover from the Covid-19 pandemic. Our portfolio of quality assets continues to draw increasing interest as demonstrated by the 6.6% increase in the number of tenants, and our retention rate of 80%.'

'We continue to focus on delivering steady value for our shareholders through the proactive management of our portfolio which has enabled us to grow property income and reduce expenses in a volatile market environment whilst also driving strong growth in NAV per share,' he added.

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