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Rising Dubai office values pay off for Emirates Reit

Net asset values per share at the UAE’s first Sharia-compliant regulated real estate investment trust edged up at the start of the year as Emirates Reit benefited from rising office values in Dubai.

In a statement to Nasdaq Dubai yesterday, the real estate investment trust reported that net asset value per share increased to US$1.408 per share at the end of February from $1.405 at the end of January after a revaluation gain.

Emirates Reit reported that the trust’s real estate portfolio had been revalued by Asteco and CBRE in January at a total of $594.15 million, up 6 per cent from $560m in June as office values in the emirate continued to rise despite a slowdown in the housing market.

The news comes as property brokers are reporting increases in rents and occupancy levels for some parts of the Dubai office market, which was hit hard during the global financial crisis.

According to the property broker Asteco’s latest market report, after crashing by 65 per cent between 2008 and 2012, average office values in Dubai increased by 13 per cent last year.

“The office market has lagged behind the residential market by a full 12 months, with rental rates lows in 2012 and slow growth from then,” said John Stevens, Asteco managing director.

CBRE reported that rents for prime CBD locations in Dubai increased by 6 per cent during 2014 and rents for secondary offices in the city rose by 12 per cent year on year.

It said that occupancy levels for CBD offices stood at 85 per cent at the end of the year, while the average for all Dubai office stock stood at 61 per cent.

The reit owns a portfolio of seven commercial properties in Dubai: a 128,400 square feet office park in Knowledge Village; a 459,600 sq ft Gems World Academy school in Al Barsha South; 82,800 sq ft of The Loft offices in Dubai Media City; Building 24 – a 41,000 sq ft low- rise retail and office building in Dubai Internet City; all 22 shops at Le Grande Community Mall in Dubai Marina; two restaurants at the Indigo 7 building on Sheikh Zayed Road; and 17 of the 25 office floors at Index Tower in DIFC.

Emirates Reit shares rose to a high of $1.50 in May last year after its IPO in April before plummeting to a low of $1.20 in December as global oil prices crashed. Since then it has bounced back again to $1.35 in January before falling again to about the $1.20 mark.

Yesterday shares closed 0.81 per cent higher at US$1.25.


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