Equitativa, the largest REIT (real estate investment trust) manager in the Gulf region, said its key unit Emirates REIT has reported healthy results for FY 2023 with its highest-ever total property income, which grew a 10% year-on-year growth hitting $74 million, while the total assets crossed the $1 billion mark.

Announcing the results for the 12-month period ended December 31, 2023, Equitativa said its REIT experienced strong growth, with its operating profit surging by 37% to hit $44 million for the Financial Year.

The net asset value grew by 34% to close at $500 million with a NAV per share of $1.57, it stated.

According to Equitativa, the value of investment properties increased by 18% to $924 million for FY2023 while the total assets closed at $1.037 billion.

This robust performance in 2023 underscores the importance of REITs as a sustainable vehicle for investors to diversify their portfolio with productive, income-generating assets, it added.

Commenting on Emirates REIT’s 2023 performance, Equitativa CEO Thierry Delvaux, 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 are 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," he noted.

Delvaux said: "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," he added.

According to Delvaux, the occupancy across the Emirates REIT portfolio increased by 1.7% to 86% for FY 2023, while the passing rental rates across the commercial and retail portfolio increased by 10% y-o-y to AED1,809/sqm/annum.

Total number of tenants for the portfolio increased by 8% from 372 to 402 and the retention rate by area was 79%, he added.

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