After Emaar, DAMAC posts poor Q4 results
Dubai-based real estate firm DAMAC Properties reported a 12 per cent drop in fourth-quarter net profit on Thursday (February 11).
The developer made a net profit of AED844 million for the three months leading up to December 31, compared with a profit of AED959.3m during the same period a year earlier.
The company made a full-year net profit of AED4.51 billion, up by 30 per cent from AED3.48bn in 2014, while revenue stood at AED8.54bn, it said in a statement.
The DAMAC result comes a day after Emaar Properties, the builder of the world’s tallest tower, Burj Khalifa, reported a near-flat fourth-quarter net profit after it took a write-down as the result of a fire at its Address Downtown hotel on New Year’s Eve.
Emaar, in which Dubai’s government owns a minority stake, made a net profit of AED1.03bn in the three months starting October 31, compared to AED1.05bn a year earlier.
“The Dubai real estate market is at a consolidation point in the cycle and the rapid growth witnessed in 2012-2014 is now behind us,” says Hussain Sajwani, Chairman of DAMAC.
He stresses that the current environment is very different from that of 2008 as stakeholders, such as government, developers, providers of capital and investors, have learnt their lessons from the property crisis then.
“However, this market creates opportunities for well-capitalised and experienced companies like ourselves with a strong track record,” adds Sajwani.
He remarks that supply in Dubai did not exceed 8,000 units last year, far below the predictions from property agencies and consultants who put the figure at 25,000 units.
He expects that the total supply in Dubai will fall short by 10,000 new units in 2016.
This shortage will act as the “cornerstone of the market resilience” to “drive the market back into positive-pricing growth territory in the second half of the year or early 2017,” he said.
(With inputs from Reuters)