The Dubai developer Union Properties has reported a profits surge of 246 per cent in its third quarter results.
Dubai’s Union Properties trebles third-quarter earnings
The Dubai developer Union Properties said third-quarter earnings more than trebled from a year ago.
The developer behind Motor City and the Green Community reported profits for the three months to the end of September rose to Dh171.9 million, compared with Dh49.6 million a year earlier.
Revenues rose from Dh328.3m to Dh1.1 billion.
This was driven by an increase in property management and sales, which rose 22-fold from Dh42.9m a year ago to Dh964m this time around.
Revenues from other operating activities shrank 31 per cent from Dh285m last year to Dh196m.
Profits for the nine months to the end of September stood at Dh307m – an increase of 97 per cent compared with the same period the year before and 18 per cent above the Dh260m the company forecast the previous quarter.
Total revenues rose 46 per cent to Dh1.9bn over the nine months period but costs also increased 45 per cent from Dh1.1bn to Dh1.6bn.
The company, which has spent the past five years tackling a massive debt burden, announced in September that it planned to develop six new projects at Motor City worth some Dh1.5bn over the next three years, which include a mall and a theme park.
At the time the developer also said it planned to allow increased ownership of its shares by non-UAE investors. Non-UAE ownership of Union shares is currently capped at 15 per cent.
The company, which suffered losses of Dh1.56bn in 2011, was forced to sell many of its prestigious assets, including the Ritz-Carlton Hotel and substantial stakes in Limestone House and Index Tower.
However, Union shares have rebounded since the start of the year, bolstered by a buoyant property market in Dubai, the restructuring of key debt agreements with Emirates NBD last year, and the successful renegotiation of debt with Abu Dhabi Commercial Bank in April.
Shares have risen steadily over the year from less than 4 fils at the start of January to close at 95 fils yesterday.
“We believe that these results are another positive sign for the real estate sector in Dubai,” said Saleem Khokar, the head of equities at National Bank of Abu Dhabi. “This year the increase in profits has come from real activities rather than real estate revaluations which seems to show that the much talked about recovery in the property market is actually happening.”