Emirates REIT (EREIT) has reported its 2015 financial results. Total revenue came in at USD41.5 million (+12.4%, -1.7% versus EFGe), while its gross profit was USD16.7 million (-7.9% Y-o-Y, +1.3% versus EFGe). This translates to 40.4% in Gross Profit Margin (GPM) down 8.9 pps and slightly higher than our estimate of 39.2%. EBITDA was USD14.8 million (-13.3% Y-o-Y, +0.9% versus EFGe). Net income before revaluation gains came in at USD8.2 million (-26.0% Y-o-Y, +5.4% versus EFGe), while net income after revaluation gains was USD61.5 million (+26.7% Y-o-Y, +5.0% versus EFGe). This implies USD11.7 million in revenue for 4Q2015 (+21.4% Y-o-Y, +8.6% Q-o-Q, -5.8% versus EFGe) and USD15.5 million for net income after revaluation gains (+130.6% Y-o-Y, +41.5% Q-o-Q, +23.2% versus EFGe). Borrowings to gross assets stood at 34.7% in December 2015, up from 25.8% in December 2014, showing a 8.9 pps Y-o-Y hike, yet still below the DFSA regulation ceiling of 50%.   The portfolio’s occupancy rate expanded by 10.1 pps Y-o-Y in December 2015 to reach 76.7% (including the Index Tower) and by 130 bps to 95.4% (excluding the Index Tower). The market value of the portfolio grew by 17% Y-o-Y to reach USD673 million, on the realisation of USD53.3 million worth of valuation gains, 70% of which was to account for the cost of work completed at the Index Tower. NAV reached USD1.57/share in December (USD1.56/share in November 2015, USD1.44/share in December 2014), implying a P/NAV of 0.75x, as of yesterday’s closing price.   An overall good set of results, with decent progress made at the Index Tower driving overall portfolio occupancy rate and increasing contribution to overall rental income from cUSD13,000 in 2014 to cUSD1.12 million (slightly short of our estimate of USD1.28 million for the year). As of the end of 2015, the building had 21 tenants and a total occupancy rate of 12.8%. We estimate rental income from the Index Tower to grow to USD10.1 million in 2016 and with a 29% five-year CAGR starting 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 5.6x for 2016e and 5.3x for 2017e and offers a dividend yield of 6.8% for 2016e. We have a Neutral recommendation on the name given slim upside potential of 5.1%. (Company disclosure, Mai Attia, Sara Boutros)   Emirates REIT (DU): USD1.18 as of 16 February 2016, Rating: Neutral, FV: USD1.24 per share, MCap: USD354 million, REIT DU / REIT.DI