Emirates REIT delivered a remarkable rebound in 2024, posting record property income, executing strategic asset sales at premium valuations, and successfully refinancing its sukuk. Under the leadership of Thierry Delvaux, CEO of Equitativa Group, the manager of Emirates REIT, the organization has sharpened its growth trajectory and positioned the REIT for sustained performance. This comprehensive interview examines the key drivers behind the turnaround, the evolving UAE real estate landscape, and Delvaux’s strategic vision for 2025 and beyond. The discussion reveals a disciplined two-stage strategy, a prudent refinancing path, evolving investor sentiment in Dubai, and a forward-looking view on the UAE’s REIT ecosystem and office and education markets. It also delves into sustainability, Dubai’s role on the global stage, and the anticipated challenges and opportunities for 2025 and the years ahead.
Turnaround drivers in 2024: occupancy gains and asset divestment at premium
The transformation in Emirates REIT’s performance stems from a simple, two-stage strategy designed to optimize asset utilization while de-risking the balance sheet through selective disposals. In the first stage, the objective was to rapidly lift occupancy rates to strengthen cash flow and overall asset quality. Between July 2023 and the end of December 2024, Emirates REIT achieved a notable 9.1 percentage point increase in occupancy, a move that directly supported the growth of gross rental revenue for its commercial assets, which rose by approximately 28 percent. This occupancy-driven uplift was not merely a numbers game; it reflected a deliberate shift in tenant mix, lease renewal activity, and targeted investments in properties that could command higher occupancy with improved terms. The second stage focused on capital discipline: taking advantage of a robust market to divest selected assets at premium valuations, thereby reducing the finance-to-value (FTV) ratio to below 30 percent. The outcome of these two stages enabled the REIT to position itself strongly for refinancing actions. By the end of the summer, the balance sheet had improved sufficiently to pursue a refinancing of the sukuk, which ultimately occurred in December, marking a pivotal milestone in the REIT’s financial resilience and long-term stability.
This two-stage playbook illustrates a balanced approach to growth: optimize operating metrics through higher occupancy and riper income streams, then deploy capital discipline through selective asset sales to reduce leverage. The strategic focus on occupancy not only expands revenue but also enhances the underlying quality and appeal of the asset portfolio, making it easier to attract new investment and sustain long-term leasing demand. The asset divestments, completed at premium valuations, served multiple purposes: they reduced debt, lowered financing costs, improved risk weighting, and freed up capital for reinvestment into higher-conviction opportunities. These moves collectively strengthened Emirates REIT’s profile as a steady, income-generating vehicle with a clearer path to dividend delivery and capital growth. The execution of these steps in 2024 was supported by a thoughtful engagement with rating agencies and investors, culminating in a recognized improvement in credit quality and funding flexibility.
The journey toward the sukuk refinancing was shaped by an appreciation of the quality and trajectory of Emirates REIT’s portfolio. The company began with a robust asset base, and the process benefited from a transparent view of the balance sheet and earnings growth. This transparency helped in communications with credit rating agencies, which then contributed to a more favorable funding environment. The organization leveraged the enhanced investor profile that emerged as performance improved, attracting high-quality institutional investors and broadening the investor base. The partnership with HSBC London was instrumental in guiding the refinancing process, providing strategic oversight and facilitating engagement with potential buyers of the new sukuk. The refinancing decision was not taken in isolation; it was the culmination of a sequence of positive indicators—strong occupancy trends, growth in gross rental revenue, improved asset quality, and a disciplined approach to capital structure—that collectively made the refinancing both feasible and advantageous.
In terms of implementation, the two-stage plan required tight operational discipline across the portfolio. It involved prioritizing leases with favorable economics, renegotiating terms where possible, and ensuring a pipeline of tenants that would sustain higher occupancy over the medium term. The asset sales were carefully chosen to maximize value without compromising portfolio diversity or long-term strategic aims. The premium pricing achieved in these sales underscored market demand for well-positioned assets in Dubai’s real estate market and reinforced the REIT’s credibility as a disciplined, value-driven investor. The net result of these efforts was a stronger, more resilient capital structure that provides a stable platform for continued earnings growth, improved cash flow, and enhanced ability to navigate potential market fluctuations in the UAE property market.
In the broader context of Emirates REIT’s 2024 performance, the occupancy uplift and asset divestitures at premium valuations were not isolated events; they were integrated into a broader growth narrative that aimed to strengthen the REIT’s earnings power, reduce leverage, and deliver sustainable value to shareholders. The strategic emphasis on occupancy growth provided a reliable lever for revenue expansion, while premium asset sales unlocked incremental equity value and risk mitigation. The combination of these elements created a constructive feedback loop: higher occupancy supported stronger cash flows and valuations, which in turn made refinancing more accessible and favorable, thereby reinforcing the REIT’s financial stability and investor appeal. Looking ahead, the emphasis on optimizing the portfolio for higher occupancy and maintaining a disciplined approach to acquisitions versus divestitures remains central to Emirates REIT’s ongoing strategic framework as it pursues a path of steady, sustainable growth.
Sukuk refinancing: challenges, execution, and impact on stability
The refinancing of Emirates REIT’s sukuk in December represented a major achievement with wide-reaching implications for the REIT’s financial posture and investor perception. The process began with a recognition of the importance of a strong portfolio base and the credibility that comes with independent ratings. The management team, led by Delvaux, placed initial emphasis on engaging with Fitch, a global rating agency known for providing an impartial, cross-border assessment of performance and potential. Achieving a BB+ instrument rating for the new sukuk was a milestone that broadened the pool of prospective investors and improved the overall attractiveness of the offering. The improved rating translated into a more favorable pricing environment and access to higher-quality investors, which in turn contributed to better funding terms and greater liquidity for Emirates REIT’s capital structure.
One of the defining elements of the refinancing story was the credible demonstration of balance sheet clarity and income growth. The positive trajectories in property income and net property income during 2023 and 2024 created a compelling case for investors to commit to the new sukuk. The clearer, more predictable cash flows associated with the improved occupancy levels and asset performance reinforced the perceived resilience of Emirates REIT’s earnings stream. This clarity reduced perceived risk and helped shift investor sentiment toward a favorable assessment of the REIT’s credit profile. The refinancing was not simply a debt replacement exercise; it represented a strategic recalibration that aligned the REIT’s debt maturity profile with its improved earnings power and asset quality.
The process of refinancing was also enhanced by the involvement of a prominent banking partner, HSBC London, which took a leading role in coordinating and managing the transaction. The collaboration with HSBC London brought experienced execution capabilities, access to a broad investor base, and efficient management of regulatory and market considerations. The partnership helped facilitate due diligence, investor communications, and the final placement of the new sukuk, ensuring a smooth transition from the old financing arrangement to the new instrument. The outcome was a refinancing that fortified Emirates REIT’s balance sheet, reduced refinancing risk, and provided a more stable platform for capital allocation, distributions, and strategic investments going forward.
In terms of impact on performance and stability, the sukuk refinancing delivered several tangible benefits. First, the BB+ rating for the new sukuk positioned Emirates REIT as a credible credit in the eyes of investors seeking exposure to UAE real estate assets with defensive characteristics. The improved funding environment contributed to lower financing costs and greater debt capacity, enabling continued investment in core assets and potential selective acquisitions aligned with the REIT’s strategic priorities. The refinancing also helped to align debt maturity with the expected earnings trajectory, reducing roll-over risk and providing greater visibility for future cash flows.
Second, the refinancing complemented the broader acceleration of occupancy and revenue growth observed in 2024. With stronger earnings visibility and a disciplined capital structure, Emirates REIT is better positioned to weather macroeconomic fluctuations and to capitalize on opportunities arising from Dubai’s dynamic real estate market. The financing team’s ability to secure high-quality investors and to achieve favorable terms demonstrated the market’s confidence in the REIT’s strategic direction and governance framework. This enhanced profile should contribute to continued access to cost-effective funding in the coming years, supporting a strategy focused on sustainable income generation, prudent risk management, and value creation for shareholders.
Finally, the successful refinancing paves the way for future portfolio optimization, including potential disposals, accretive acquisitions, and targeted capital investments. By lowering leverage and extending debt maturities, Emirates REIT gains flexibility to pursue opportunities that align with its occupancy-driven earnings growth and cost optimization agenda. The combined effect of higher occupancy, premium asset sales, and the sukuk refinancing creates a robust platform for delivering dividends and enhancing shareholder value while maintaining a disciplined approach to capital allocation in a evolving UAE real estate market.
Market sentiment and the UAE real estate outlook: near-term to medium-term prospects
Dubai’s real estate market has shown substantial growth in recent years, setting the backdrop for Emirates REIT’s performance and strategy. Emirates REIT operates in two key segments—office space and education—areas that remain largely undersupplied in the market. The firm’s leadership notes that while these sectors are attractive, investor sentiment remains cautious in the near term. The undersupply situation in offices and education spaces suggests a favorable long-term structural demand dynamic, yet near-term investor appetite may be tempered by broader macroeconomic considerations and market-specific risk factors. The cautious sentiment is expected to persist in the medium term, as market participants weigh the implications of supply constraints, rental growth potential, and the pace of new development. This environment creates a scenario in which well-positioned REITs with high-quality portfolios and disciplined capital management can outperform by delivering stable cash flows and resilient earnings.
For Emirates REIT, the outlook for the UAE real estate sector hinges on several interrelated factors. The first is the ongoing supply-demand balance in the office segment, which is characterized by persistent undersupply relative to demand. This dynamic has implications for rent levels, occupancy, and tenant retention, and it underscores the importance of portfolio optimization and active asset management for sustaining favorable metrics. The second factor is the education segment, which is also undersupplied and experiencing strong demand signals. The REIT’s exposure to this sector positions it to benefit from robust leasing activity and long-term occupancy stability, provided that the assets remain attractive to tenants and institutions seeking space for learning and administrative functions.
Investors’ attitudes toward UAE real estate continue to evolve in response to the country’s broader investment appeal. The growth of REITs as a preferred investment vehicle in the UAE is part of a broader trend toward regulated, income-focused real estate investment structures. The market is increasingly recognizing REITs as an efficient path to real estate exposure that offers transparency, governance, and potential tax advantages. In this context, Emirates REIT’s strategy to optimize occupancy, pursue disciplined asset management, and pursue strategic disposals aligns with investor preference for sustainable, earnings-driven vehicles. The evolving regulatory landscape, including potential corporate tax exemptions for REITs, is likely to enhance the attractiveness of REIT structures and to contribute to higher market activity, a development that could support the expansion of the UAE REIT ecosystem over the next five years and beyond.
In the near term, the market’s cautious tone may influence pricing and deal flow, even as underlying fundamentals improve. However, the structural undersupply in key asset classes supports the case for ongoing rental growth and capital appreciation of well-positioned properties. The UAE’s diversified economy, robust infra-structure development, and progressive regulatory environment continue to create a favorable environment for real estate investment, particularly for vehicles like REITs that offer transparent governance and income-oriented strategies. The dialogue around sustainability and ESG considerations is increasingly integrated into investment decision-making, with investors seeking assets and portfolios that demonstrate energy efficiency, environmental stewardship, and social responsibility. Emirates REIT’s own track record, including the sustainability attributes of its portfolio and the focus on energy-efficient assets such as Index Tower, resonates with this broader investor preference and can bolster long-term demand for its assets and its shares.
Looking ahead, sentiment among UAE real estate investors is likely to become more positive as the market demonstrates resilience and the regulatory framework evolves to create a more conducive investment climate. The momentum around REITs in the UAE is anticipated to accelerate, with more participants recognizing the advantages of regulated, transparent, income-focused investment structures. In the medium term, Emirates REIT’s ongoing strategy—capturing occupancy-driven revenue growth, optimizing costs, and selectively disposing of non-core assets at premium valuations—should position the REIT to benefit from this positive market trajectory. The combination of favorable fundamentals, a credibility-enhancing refinancing story, and a disciplined approach to capital allocation could translate into stronger investor confidence, improved liquidity, and an overall favorable environment for Emirates REIT’s continued growth and resilience.
UAE REIT landscape and the five- to ten-year outlook: opportunities and promising asset classes
Managing a REIT is a complex, multi-faceted undertaking that requires vigilance across numerous moving parts and market dynamics. The executive team emphasizes that the UAE REIT market is poised for growth as it increasingly becomes a more established and attractive investment vehicle. With potential corporate tax exemptions for REITs in view, the UAE is expected to see an expansion in the number of REITs over the next five years. This anticipated growth in institutional interest and market depth could contribute to greater liquidity, tighter spreads for high-quality assets, and a more robust ecosystem for real estate investment that benefits both developers and investors. The expansion of the REIT landscape would also support the development of a broader range of investment opportunities and more diversified portfolios, while maintaining the discipline that investors expect from regulated REIT structures.
Among asset classes, the Office sector stands out as the most promising in the current and near-term horizon. The demand for office space has outpaced supply, driving rental growth and occupancy improvements across well-located properties. The scarcity of office space supports a favorable pricing environment for landlords and REITs with strong tenancy profiles and modern, efficient facilities. This trend aligns with the broader global shift toward flexible, high-quality office environments that support hybrid working models while delivering essential collaboration spaces for businesses. The Office segment’s outstripping demand suggests that assets with modern amenities, energy efficiency, and strategic location could command premium rents and generate attractive yields for REIT investors.
The Education sector also presents a vibrant opportunity set within the UAE real estate market. There is robust demand for schools and related facilities that continue to expand to meet the needs of a growing student population. The sector’s resilience and potential for stable occupancy make it an appealing anchor for long-term rental income within a diversified REIT portfolio. The combination of office and education assets within Emirates REIT’s portfolio aligns well with the market’s structural dynamics, offering a balanced exposure to two asset classes with distinct demand drivers and favorable growth trajectories. The emphasis on education assets also aligns with social and community goals, adding a dimension of social value to investment performance.
Beyond these two primary sectors, the UAE’s real estate market could benefit from strategic diversification into related asset classes where suitable. While the focus remains on office and education, a thoughtful approach to M&A and asset repositioning could yield opportunities in complementary segments that support the REIT’s income generation, risk management, and dividend objectives. Any expansion strategy would require careful assessment of asset quality, location, lease terms, and compatibility with the overall portfolio’s risk-return profile. The ongoing emphasis on ESG considerations and sustainability is likely to influence investment decisions, as investors increasingly prioritize energy efficiency, green certifications, and long-term environmental stewardship in their portfolios. This broader context suggests that the UAE REIT landscape will continue to evolve, with Emirates REIT positioned to participate in a growth trajectory characterized by stronger liquidity, healthier capital markets, and a more diversified investor base.
Strategic priorities for Emirates REIT in 2025: optimization, dispositions, and dividends
For 2025, Emirates REIT outlines a clear strategic path focused on maximizing asset performance and optimizing profitability, while maintaining a disciplined stance on capital allocation. The central objective is to ensure that the assets in the portfolio deliver the best possible returns through a combination of higher occupancy, meaningful rental uplifts, and rigorous cost optimization. The core emphasis is on driving enhanced operating performance and cash flow generation, thereby supporting a sustainable dividend policy that aligns with shareholder expectations. Dispositions and selective investments will remain in play, but the prioritization for 2025 centers on optimizing profit and ensuring robust returns to shareholders through stable dividends. The strategy reflects a careful balance between expanding earnings potential and preserving capital discipline, with a clear focus on improving the portfolio’s quality and resilience.
Sustainability and ESG considerations are increasingly central to Emirates REIT’s growth strategy. The portfolio already demonstrates strong sustainability characteristics, with Index Tower identified as one of Dubai’s most energy-efficient buildings. While this advantage has not been aggressively marketed in the past, there is now a concerted effort to obtain formal portfolio certification that recognizes the sustainability attributes to reassure and attract investors and occupiers. This certification process is expected to bolster the REIT’s value proposition by providing measurable evidence of energy efficiency and environmental stewardship. The integration of ESG considerations into the growth strategy aligns with broader market trends and investor expectations, contributing to enhanced real estate performance and potentially favorable capital market outcomes.
In terms of market positioning, Emirates REIT expects continued interest in REITs as a preferred investment vehicle within the UAE. The anticipation is that more investors will recognize the appeal of regulated, transparent, income-focused real estate investments, particularly in a market where corporate tax considerations and regulatory frameworks are evolving. The REIT’s approach to asset management, capital allocation, and investor communications will be geared toward sustaining growth in occupancy, maximizing rental uplifts, and achieving cost efficiencies that support dividend growth. The emphasis on disciplined acquisitions and dispositions will continue, ensuring that any expansion or repositioning aligns with the strategy of delivering reliable income and long-term shareholder value.
ESG integration is set to play a heightened role in Emirates REIT’s 2025 agenda. The company aims to further strengthen its sustainability credentials by achieving recognition for the portfolio’s energy efficiency and environmental performance. This involves not only operational improvements but also certification efforts intended to provide objective, independent validation of the REIT’s sustainability attributes. Investors increasingly seek assets with demonstrable ESG credentials, and Emirates REIT’s ongoing work in this area should enhance its ability to attract high-quality capital and support stronger investment demand.
Strategically, the plan for 2025 also contemplates opportunities and sectors that could support growth or provide diversification where appropriate. While the Office sector remains a top priority due to the current undersupply and rental growth potential, the Education sector’s vibrant demand dynamics could continue to support a steady income base and occupancy gains. The REIT’s decision-making process will hinge on risk-adjusted returns, asset quality, and long-term portfolio resilience, with a clear preference for assets that offer predictable cash flows, strong lease covenants, and the potential for meaningful rent growth. The overarching objective is to deliver superior returns while preserving financial stability and sustaining dividend outcomes that meet investor expectations.
Sustainability, ESG, and Dubai’s role in the global real estate landscape
Sustainability and environmental, social, and governance principles are increasingly integral to Emirates REIT’s growth strategy. The portfolio already includes highly energy-efficient assets, with Index Tower highlighted as a standout example of energy efficiency within the Dubai market. Recognizing the value of communicating these attributes to investors and occupiers, Emirates REIT is now pursuing formal certification of its portfolio to publicly acknowledge and quantify the sustainability advantages it offers. This certification is expected to enhance investor confidence and support a more compelling value proposition for tenants seeking high-performance, sustainable work environments. By elevating the portfolio’s ESG credentials, Emirates REIT aims to attract capital from investors who prioritize sustainable, long-term returns and robust governance standards.
Dubai’s real estate market remains an attractive destination for global investors, driven by the city’s agility, fast-paced development, and capacity for rapid innovation. Dubai’s ability to adapt quickly and implement innovative solutions makes it a compelling hub for investment, with the potential to contribute to the UAE’s emergence as a world-leading financial and real estate market. Emirates REIT’s leadership believes that the ongoing growth and development of Dubai’s economy, together with ongoing infrastructure improvements and regulatory clarity, will cement the city’s status on the global stage. The REIT sees its role as contributing to Dubai’s evolution as a premier global financial center and a magnet for international capital seeking exposure to high-quality real estate assets in a dynamic, forward-looking market.
The broader UAE market is expected to benefit from Dubai’s continued momentum and from the government’s supportive stance on real estate and investment activity. The interplay between policy developments, tax considerations, and market fundamentals will influence the trajectory of REIT proliferation and the attractiveness of REIT structures across the country. Emirates REIT’s strategy is designed to align with these macro trends, leveraging its strong portfolio and disciplined approach to capital allocation to participate in the market’s ongoing expansion. Investors will likely weigh the REIT’s earnings consistency, asset quality, and ESG credentials as key determinants of value and risk, while Emirates REIT continues to refine its approach to occupancy optimization, rental uplifts, cost management, and selective investments and dispositions that enhance shareholder value over the long term.
The 2025 and beyond outlook: challenges, opportunities, and Emirates REIT’s positioning
Looking ahead to 2025 and beyond, Emirates REIT expects the office market to remain heavily undersupplied, with the potential for meaningful new stock to support occupancy gains and rent growth across the portfolio. The anticipated undersupply provides a favorable backdrop for Emirates REIT to maximize occupancy levels and realign rental rates across its holdings. However, there are challenges to consider, including the need to incentivize developers to increase office supply in Dubai, a task that has proven difficult in some cycles. If demand continues to outpace supply, pre-leasing could emerge as a prominent mechanism for organizations seeking to secure future space, which in turn would tighten availability further. In such a scenario, the market could experience a pull-by-demand effect, with pre-leasing driving early commitments but potentially constraining the availability of high-quality space for new entrants. This dynamic could imply heightened competition for prime assets and opportunities to capture premium rent levels, but it would also raise the stakes for tenants seeking to secure space as vacancy levels shrink.
For Emirates REIT, these conditions present both opportunities and risks. On the opportunity side, continued demand strength and constrained supply in offices could enable the REIT to sustain or even enhance occupancy, driving rental uplifts and improving cash flow generation. This, in turn, would support a more resilient dividend profile and stronger long-term value creation for shareholders. On the risk side, the same undersupply dynamic could lead to higher rent inflation, which could challenge tenant demand if vacancy costs rise or if macroeconomic conditions tighten credit conditions for tenants. The REIT’s strategy of cost optimization, disciplined capital allocation, and targeted investments and disposals can help mitigate these risks by preserving margins and ensuring that the portfolio remains attractive to tenants and investors alike. Emirates REIT’s positioning emphasizes careful management of leasing risk, tenant retention, and ongoing asset improvement initiatives that support a robust earnings base in a potentially tighter market.
In terms of capital markets and fundraising, Emirates REIT’s refinancing success, supported by a solid rating and a credible investor base, provides a positive template for future funding activities. The BB+ rating for the new sukuk implies a credible credit profile and may enhance the REIT’s capacity to access debt capital at favorable terms over time. As the UAE market evolves, the REIT’s ability to sustain strong occupancy, deliver rental uplifts, and optimize costs will be crucial to maintaining investor confidence and realizing dividends. The strategic emphasis on sustainable, high-quality assets—paired with disciplined capital management and proactive portfolio optimization—positions Emirates REIT to capitalize on the market’s structural advantages while navigating potential headwinds. The overall outlook suggests a constructive environment for Emirates REIT’s continued growth and resilience, anchored in a portfolio that benefits from undersupply in key sectors, strong governance, and a commitment to ESG excellence.
At a glance: Emirates REIT in 2024 — a detailed performance and activity recap
The year 2024 marked a defining period for Emirates REIT, characterized by a record-high property income, strategic asset disposals, and a successful sukuk refinancing that underscored the REIT’s evolving financial strength. The portfolio’s performance was driven by a deliberate effort to optimize occupancy and capital structure, supported by a broader market recovery and the UAE’s resilient real estate fundamentals. The following points summarize the year’s key highlights and strategic moves, illustrating how the REIT navigated market dynamics to deliver value for stakeholders.
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Property income reached a record level for the REIT, reflecting the successful execution of portfolio optimization and occupancy gains. This milestone demonstrates the underlying strength of Emirates REIT’s asset mix and the effectiveness of active asset management strategies in driving topline income growth. The higher occupancy levels contributed to a larger revenue base, reinforcing the earnings potential of the portfolio and supporting a more stable cash flow generation framework. The record property income serves as a cornerstone for the REIT’s longer-term strategy, signaling the viability of its revenue model under prevailing market conditions and its capacity to sustain growth in the face of market fluctuations.
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Net property income also demonstrated robust growth, rising in line with the portfolio’s enhanced performance. The increase in net property income underscores the efficiency gains achieved through improved asset management, optimized leasing activity, and prudent cost control. Higher net property income translates into stronger profitability at the property level, contributing to a healthier operating margin and improved ability to service debt and deliver dividends. This improvement is a positive signal to investors that the REIT’s assets are generating meaningful cash flows after property-level operating expenses, reinforcing confidence in the portfolio’s core earnings power.
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Operating profit experienced a significant uplift, reflecting a substantial year-on-year improvement. The 37 percent increase in operating profit highlights the effectiveness of the REIT’s strategic initiatives, including occupancy expansion, rental uplifts, and cost optimization measures. A higher operating profit, in combination with stronger revenue streams, supports more robust free cash flow generation and enhances the potential for sustainable dividend growth. The elevation in operating profit also indicates that the portfolio’s asset-level performance is translating into meaningful gains at the corporate level, helping to stabilize the REIT’s earnings trajectory and reduce volatility.
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In the summer, Emirates REIT completed the sale of Trident Grand Mall, a two-floor retail component of Trident Grand Residence, located in Dubai Marina’s Jumeirah Beach Residence area. The sale price was Dhs74 million, representing a price above the asset’s most recent valuation. The premium achieved in this disposal underscores the market’s appetite for well-located, asset-backed retail properties in prime Dubai locations and demonstrates the REIT’s ability to optimize capital allocation by exiting non-core assets at favorable valuations. The sale contributed to deleveraging and allowed the REIT to redeploy capital into higher-conviction opportunities that align with its 2025 strategy.
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In October, Emirates REIT completed the sale of Office Park, a Grade A commercial asset in Dubai Internet City, to TECOM Investment (a wholly owned subsidiary of TECOM Group). The sale price was Dhs720 million, representing a substantial premium over the property’s fair valuation as of June 30, 2024. This disposal further reinforced the REIT’s strategy of disposing assets at premium valuations to strengthen the balance sheet and reduce leverage, while maintaining a portfolio of high-quality properties with strong leasing prospects. The premium realized in this sale demonstrated market demand for strategically positioned assets with strong fundamentals and long-term income visibility.
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In December, Emirates REIT agreed to fully refinance its existing sukuk, which was due in December 2025, with a new sukuk valued at Dhs205 million and maturing in December 2028. The new instrument was rated BB+ by Fitch, marking a significant milestone in securing enhanced financing terms and extending debt maturities. The refinancing completed a key objective of lowering refinancing risk and aligning debt maturity with the improved earnings trajectory from occupancy gains and asset-level performance. The BB+ rating and the refined debt structure together strengthen the REIT’s balance sheet, providing a more stable platform for ongoing capital allocation decisions, dividend policy, and long-term strategic investments.
These highlights illustrate Emirates REIT’s strategic evolution in 2024, balancing revenue growth through occupancy optimization with value creation through selective, premium disposals and a strengthened debt position via sukuk refinancing. The year’s activities demonstrate a disciplined approach to capital management, asset optimization, and investor relations, aimed at delivering sustainable cash flows, improved profitability, and enhanced shareholder value. The combination of record property income, premium asset sales, and a credit-positive refinancing underscores the effectiveness of Emirates REIT’s strategy in navigating a dynamic Dubai real estate market and sets a solid foundation for continued growth in 2025 and beyond.
Conclusion
Emirates REIT’s 2024 results reflect a disciplined, dual-track strategy that simultaneously enhances operating performance and strengthens its balance sheet. The 9.1 percentage point occupancy lift and a 28 percent uplift in gross rental revenue for commercial assets were achieved through targeted portfolio optimization and strategic leasing actions, while premium asset disposals lowered leverage and created capital to fund growth and refinancing. The sukuk refinancing, supported by a BB+ rating from Fitch and the pivotal role of HSBC London, marked a turning point in the REIT’s financing and risk management, enabling a more resilient capital structure and longer debt maturities. Investor sentiment in the UAE remains cautiously optimistic in the near term, particularly for undersupplied sectors like offices and education, with a broader growth trajectory for REITs driven by regulatory clarity and potential corporate tax exemptions. Emirates REIT’s forward-looking plan for 2025 emphasizes higher occupancy, rental uplifts, cost optimization, and disciplined capital allocation to deliver profits and dividends, while maintaining a strong ESG focus and pursuing sustainability certifications to enhance investor confidence. Dubai’s agile, fast-paced environment and its ambition to become a world-leading financial and real estate market continue to attract global investors, with Emirates REIT well-positioned to benefit from structural undersupply in its core asset classes and to play a meaningful role in the UAE’s evolving REIT landscape. The challenges ahead—primarily the need to incentivize new office stock and manage potential pre-leasing dynamics—also offer opportunities for the REIT to capture higher rent growth and broaden its investor base as the UAE real estate market matures. Emirates REIT remains focused on delivering sustainable returns for stakeholders through disciplined asset management, strategic disposals, and prudent financing, aiming to create long-term value in a market characterized by growth, innovation, and a forward-looking regulatory framework.