Damac profit surge concludes strong H1 for UAE developers
Luxury developer Damac Real Estate announces a 39 per cent spike in H1 2014 profits, following even stronger results by competitors Emaar and Nakheel.
Boosted by the completion and handover of its first international project, Al Jawharah in Saudi Arabia, Damac has raked in a net profit of $463 million since the beginning of this year. Its Q2 record, while also positive, grew at a more modest rate of 18 per cent based on Q2 of 2013.
Nonetheless, the biggest contributor to its strong performance is its surging revenues in 2014, which have climbed by 57 per cent to $992m.
According to CEO Hussain Sajwani, “Customer demand for our luxury product remains high, and we strongly believe that the current real estate market in Dubai remains sustainable, supported by a structural and ongoing supply / demand imbalance for high-end property. We have a strong brand across the Middle East and we believe this to be a true differentiator from our competitors.”
On the topic of competitors, Damac’s results come as Dubai-listed Emaar Properties announced last week that their H1 2014 profits grew 41 per cent to $471m. In contrast, however, their total revenues contracted slightly as supposed to H1 2013.
Similarly, Nakheel Properties, the developers of Dubai’s Palm Islands, also celebrated a rise in profits in H1 by 54 per cent, earning them a total of $520m this year.
Interestingly, Damac, who hopes to hand over between 4000 and 5000 luxury units by the end of the year, is currently listed on the London Stock Exchange. However, at the beginning of the month it was suggested that the developer is set to switch its shares to the Dubai Financial Market. With a market capitalisation of $3.5bn, it will put Damac in the top 10 listed UAE companies.
With all three major developers showing remarkable growth, signs that Dubai’s real estate sector has truly recovered from its crisis in 2010 are strong. Nonetheless, with fears that such sudden growth may result in another property bubble, investors and regulators alike are keen to minimise volatility