ENBD REIT announced its net asset value of $172 million in the first quarter ended June 30, 2021, compared to $180 million for the previous quarter.
According to Arab Net, the 1% decline in NAV is mostly due to ongoing valuation pressures and deteriorating real estate market conditions as regional macroeconomic conditions are still in the early stages of post-pandemic recovery.
Expenses were reduced by 16.9%, after a year of actively managing operating costs in the portfolio. The occupancy rate in the portfolio also remained stable at 75% for the period ending on June 30, 2021, compared to 76% on March 31, 2021, and 75% for the same period in the previous year, according to a statement issued by the company.
An active leasing strategy that caters to tenants continues to play an important role in protecting occupancy rates, but challenges in the real estate market have slowed the recovery. The weighted average unexpired lease contract (WAULT) also increased from 3.2 years to 3.97 years as of June 30, 2021 compared to the previous year, according to a statement issued by the company.
The total dividends paid to shareholders for the year ended March 31, 2021 amounted to $9.25 million, which is equivalent to 8.6% annual dividend return from the share price of ENBD REIT. In parallel, REIT's total rental income was $7.48 million, down 11% from $8.44 million for the same period last year.
The loan to value ratio increased to 52.7% as a result of valuation pressures in the real estate portfolio, and the management team is in the process of refinancing a significant debt facility with Standard Chartered Bank amounting to $45 million. REIT maintains a regular dialogue with all lenders to ensure covenants are maintained at manageable levels.
