ENBD REIT aims to restructure amid market headwinds
The proposed restructuring is expected to enable set-term investment horizon and fairer value for shareholders
Dubai-based sharia'a-compliant real estate investment trust ENBD REIT, which is managed by Emirates NBD Asset Management, has announced its net asset value as of 31 December 2019.
ENBD REIT's net asset value stands at $246 million ($0.98 per share) following the dividend payment to shareholders of $4.9 million, as compared with the previous quarter’s net asset value of $254 million cum-dividend.
ENBD REIT's property portfolio comprises of diverse holdings, totalling 11 properties across office, residential, and alternative asset classes.
It is valued at $429 million, compared to $435 million in the previous quarter. The drop is a result of valuation losses – attributed to a general softness in the local real estate market – predominantly in residential holdings, as well as smaller adjustments in the office and retail assets, the investment trust revealed.
Occupancy across the portfolio climbed to 81% with a healthy weighted average unexpired lease term of 3.37 years.
As of 31 December 2019, the firm's loan-to-value ratio stood at 42%, and generated a net rental yield of 4.2% on NAV, or 8.7% on market capitalisation at the prevailing share price, as stated by the investment trust.
On 12 February 2020, ENBD REIT aims to meet and seek approval from shareholders to propose a transition to a privately held structure, subject to various other regulatory approvals.
Speaking about the trust’s proposed restructuring move, head of real estate at Emirates NBD Asset Management, Anthony Taylor, said: “As market headwinds continue to put pressure on valuations, our proactive leasing strategy across the portfolio resulted in improved occupancy levels, demonstrating the resilience of our assets.
"Shifting to a private structure with a limited-term investment horizon is the best strategy to realise value for shareholders and that is why we have invited our shareholders to vote on the proposed restructuring at the upcoming Extraordinary General Meeting (EGM).”