Emaar Properties underpinned the renewed confidence in the UAE economy yesterday with earnings up 45 per cent, driven by higher income from its malls and a revival in the property market.
The developer, one of the biggest in the region, said demand for its apartments and villas was growing, while Dubai Mall, its flagship asset, appeared on course to welcome a record number of visitors this year after receiving 31 million shoppers in the first half.
Emaar recorded operating profit of Dh1.22 billion (US$326.6 million) for the first six months of the year, up 45 per cent on the same period last year, on broadly flat revenues of Dh3.9bn.
“The real estate market in Dubai is turning around, led by the robust performance of key growth sectors including aviation, retail, hospitality, tourism and foreign trade,” said Mohamed Alabbar, the chairman at Emaar Properties. “The city’s appeal to high net-worth individuals as the ideal destination for a home is also gaining strength.”
Mr Alabbar’s confident rhetoric follows similarly bullish comments on the economy from Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai, last week when he said the financial crisis hurting the rest of the world was over in the UAE.
All signs are now pointing to a robust recovery in the Dubai property market, with analysts confident prices are rising in pockets of the emirate.
Total transactions increased to Dh4bn in the second quarter compared with Dh3.1bn of deals in the first quarter, a report from the property broker CBRE showed last week.
Emaar’s net operating profit for the second quarter was Dh614m, also up 45 per cent on the second quarter of last year.
“The numbers are stellar for Emaar … very good news and very solid set of numbers,” said Haissam Arabi, the chief executive at Gulfmena Investments in Dubai. “They are enjoying several factors right now: there is the resurrection of Dubai properties; and Emaar’s growing segment is their annuity fee-based businesses bringing in that growth.”
Emaar’s rental and retail business primarily comprising Emaar Malls Group, which consists of Dubai Mall, Dubai Marina Mall and other smaller assets, contributed about Dh1.3bn to first-half revenues, an increase of 23 per cent compared with same period last year.
In recent years, Emaar – the builder of the Burj Khalifa, the world’s tallest building – has increasingly focused efforts on retail and hotel assets that provide a regular recurring income, rather than sales of properties where revenues are less smooth and more dependent on the overall market.
“To add long-term value to our stakeholders, we are planning on bigger growth in our home market through projects such as the Dubai Modern Art Museum and Opera House District and the expansion of The Dubai Mall, in addition to new project launches,” said Mr Alabbar.
In March, Emaar announced it would build the modern art museum and opera house in Downtown Dubai, helping to create a new cultural district.
It is also building a new walkway from the Burj Khalifa metro station to Dubai Mall and extending the mall by one million square feet.
Other developers are also investing heavily in retail and hospitality assets with Nakheel doubling the size of Dragon Mart, building the Palm Mall and considering extending Ibn Battuta Mall.
Emaar Hospitality Group, the division looking after the company’s eight hotels, recorded revenue of Dh720m during the first six months of this year with an average occupancy of 89 per cent at its flagship Address Hotels & Resorts.
Emaar unveiled more than 200 new luxury apartments at a development called Panorama at The Views, which was fully sold on the first day of public launch.
It also launched 18 golf homes and more than 60 townhouses in Arabian Ranches, which it said had received a “solid investor response”.
Internationally, Emaar is also making headway, having handed over units in Turkey, Egypt, Saudi Arabia and Lebanon.