Emirates REIT (EREIT) has reported its 1Q2016 financial results. Total revenue came in at USD11.7 million (+24.3% Y-o-Y, -8.6% versus EFGe), with the growth coming on the back of additional income from the Index Tower (started to lease in 2H2015), and from Jebel Omar School, in addition to the overall Y-o-Y rental growth of 5% across all assets. Net income including revaluation gains was USD14.3 million (+57.8% Y-o-Y, -3.6% versus EFGe). Net income excluding revaluation gains was USD2.2 million (-14.7% Y-o-Y, +2.9% versus EFGe). The overall occupancy rate of REIT’s property portfolio reached 77.4% as of the end of March 2016, up from 76.7% in December and 66.0% in March 2015. The total value of the property portfolio increased by 2.8% over the quarter to reach USD692.2 million, on the back of progress made at the Jebel Ali School development and the fit-out work at Index Tower. Outstanding debt was USD251.5 million in March 2016, with debt-to-gross assets reached 34.1% in March, down from 34.7% in December 2015. NAV reached USD1.57/share, up from USD1.53/share in February, implying a P/NAV ratio of 0.75x.     An overall good set of results, with no major surprises. We are pleased to see overall occupancy rate continuing to increase (likely on higher occupancy rate at the Index Tower), debt-to-gross assets inching down, and property income growing in a healthy manner. We estimate rental income from the Index Tower to grow to USD10.1 million in 2016 (from USD1.1 million in 2015) and a 29% five-year CAGR starting from 2016. The Index Tower is therefore expected to act as the growth engine for the company going forward. We estimate property income to grow at 2015-19e CAGR of 21.6% and net income (excluding revaluation gains) at 51.0%. We expect the company to increase its borrowing in order to meet its capex requirements over the short-term and to sustain its high dividend payout ratio. EREIT trades at a PER of 6.0x for 2016e and 5.6x for 2017e and offers a dividend yield of 6.8% for 2016e. We have a Neutral recommendation on the name, on slim upside potential of 5.1%. (Company disclosure, Mai Attia, Sara Boutros)