signs of momentum for dubai property sector
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Last Updated : GMT 09:07:40
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Signs of momentum for Dubai property sector

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Egypt Today, egypt today Signs of momentum for Dubai property sector

Burj Khalifa developer Emaar Properties said net profit for the three months
Dubai - Arab Today

Two of Dubai’s largest property developers reported on Tuesday a boost in fourth-quarter net profit, prompting further hopes of a Dubai market recovery.
The Burj Khalifa developer Emaar Properties said net profit for the three months to the end of December 2016 increased by 56 per cent, climbing to Dh1.61 billion from Dh1.03bn during the same period a year earlier. The Q4 result beat estimates by Sico Bahrain of Dh1.32bn but missed a forecast by the Egyptian investment bank EFG Hermes of Dh1.63bn, according to Reuters.
Emaar said the quarter’s revenue increased by 16 per cent to Dh4.4bn, up from Dh3.8bn for the same period a year earlier with a rise in the contribution from the company’s real estate division as well as those from its hospitality and retail sectors.
Emaar’s fourth-quarter profit was skewed by its reversal of a provision made in its 2015 accounts against damage at its The Address Downtown hotel following a dramatic fire at the property on New Year’s Eve 2015. Earlier this month Emaar said that the Dh301m provision, which had been made in its fourth-quarter 2015 accounts, would be reversed and recorded as income in 2016’s final quarter.
Emaar sold Dh14.4 billion worth of real estate during 2016 – 41 per cent more than it had sold during the previous year.
Dubai’s second-largest listed developer, Damac Properties, also reported a slight increase in fourth-quarter net profit despite what it described as "challenging market conditions".
Damac did not provide a quarterly breakdown for its results but based on sums using previous data provided by the company, fourth-quarter net profit stood at Dh854.6 million – a 1.3 per cent increase on the previous year’s profit of Dh842.8m. The fourth-quarter result missed estimates by EFG Hermes, which forecast a net profit of Dh745m, according to Reuters.
"Although both developers announced an uptick in final quarter net profits, it would be somewhat inaccurate to generalise," said Mohammad Kamal, the executive director for equity research at Arqaam Capital.
"Damac produced significant growth in land sales revenues in Q4 as compared to last year and this was the primary driver of growth. Growth at Emaar, on the other hand, was a function of a strengthening in execution in property developments and the reversal of Dh301m in losses that were booked on The Address hotel last year."
While Emaar was able to report a 28 per cent total net profit increase for 2016 at Dh5.23bn, Damac said that its net profit for the full year had slumped by 18.1 per cent to Dh3.69bn.
"The Dubai real estate market in 2016 had stabilised over 2015, with no major fluctuations in prices," said Hussain Sajwani, Damac’s chairman. "There is demand for quality real estate but with the challenging market conditions we are operating in, what has changed is customers are seeking better value. Our medium to long-term outlook remains positive and we are well positioned to accommodate and navigate these conditions."
Emaar said that recurring revenues from its shopping malls, hospitality, entertainment and leisure businesses for 2016 was Dh5.97bn, similar to 2015, despite redevelopment at The Address Downtown Dubai. It said the recurring revenue businesses now account for 38 per cent of the total group revenue.
Damac reported that it had handed over nearly half of the total number of properties it delivered in 2016 in the final quarter of the year, again skewing its results as it completed 600 hospitality units in Damac Maison Royale The Distinction and Damac Maison Bay’s Edge
The news comes as some property brokers are starting to forecast the bottom of the current Dubai housing market cycle.
This week Asteco became the latest property broker to forecast an increase in average house prices this year after two years of declines.
It calculated that average sales prices increased in Business Bay, DIFC and International City during the final three months of 2016 even though they fell in Downtown Dubai, Dubai Marina and JBR.
Other brokers continue to forecast price falls for the remainder of 2016, with Phidar Advisory and Cluttons predicting further gradual softening.
"The residential market in the UAE remains soft in the near term, and Emaar’s numbers stand out given the strength and consistency in their sales uptake numbers," said Mr Kamal.

Source: The National

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signs of momentum for dubai property sector signs of momentum for dubai property sector



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