Emirates Reit is to spend up to Dh200 million on buying properties by early next year as it looks to take advantage of lower asset prices. Sylvain Vieujot, chief executive of the Reit's manager, Equitativa, told <em>The National</em> that it is focusing its acquisition efforts on education and office buildings in Dubai, and that "we think we are fairly close" to completing deals. "We will have some news within the next six months," he said. "If you look hard enough you will find good quality assets that we would be able to buy and keep for the long term that are at a reasonable price and yields." Emirates Reit drew down debt funding towards the end of last year with a view to making purchases in a soft Dubai market, and the higher financing charges it has incurred have weighed down profits. On Thursday, it declared a 96 per cent year-on-year fall in net profit for the six months to June 30 of $1.1 million (Dh4m), despite a 7 per cent increase in total property income of $36.2m. The Reit's bottom line was also hit by a $5m revaluation loss on the value of its portfolio, compared to a gain in the same period last year. "Actually, if you look at it, compared to others we have very low valuation losses, because the portfolio is $1 billion [and] we are only $5m. The reason for that is we have very long leases. The average lease is close to seven and-a-half years." First half results show that occupancy levels across Emirates Reit's portfolio stood at 75 per cent, although the company says this would be 81 per cent were it not for a default on a lease agreement for a school in Dubai Investments Park last year. The company has since been working on finding a replacement. "We have narrowed it down to three operators with which we are in advanced discussions," Mr Vieujot said. By June 30, the Reit's net asset value stood at $1.66 per share, compared to $1.76 per share in the same period last year. Its share price trades at a substantial discount to net asset value, though, closing at just below $0.68 per share on Nasdaq Dubai on Thursday. Mr Vieujot said the company is addressing this valuation gap, "but we need to take action that will lead to results". "Other Reits did a buyback programme and it didn't result in anything, except them having less assets, so we are really cautious about this," he said. "We think, ultimately, the key driver for us is going to be income and cashflow. As soon as cashflow is going to be higher than the dividend - and we are going to increase the dividend - I really see no reason why it should not have a very significant impact on the share price." According to consultancy Asteco, commercial office prices fell by 18 per cent year-on-year in the second quarter of 2019, although there were significant discrepancies in the level of price decline by area. For instance, price declines in Dubai International Financial Centre were less pronounced, at 9 per cent, while prices in Barsha Heights dropped 19 per cent.