Emaar Malls, the shopping malls and retail business majority owned by Emaar Properties, said on Wednesday its second-quarter net profit rose 11.2 per cent, missing analysts’ predictions.
Net profits at Emaar Malls for the three months ending June 30 rose to Dh458 million, up from Dh412m during the same period a year earlier.
EFG Hermes had forecast a quarterly profit of Dh488m.
Emaar Malls, which owns Dubai’s largest shopping centre The Dubai Mall, said that second-quarter rental income increased 9 per cent to Dh785m from Dh721m a year earlier.
The company, which was spun off from Dubai property developer Emaar in 2014, said first-half net profit surged 17 per cent to Dh987m compared with a year earlier.
First-half occupancy at Emaar Malls’ portfolio of shopping centres, which includes Souq Al Bahar and Dubai Marina Mall, stood at 96 per cent, similar to the previous year.
Emaar Malls reported that second-quarter sales, marketing and general expenses soared 69 per cent to Dh73m.
“The robust growth of Emaar Malls during the first half of the year highlights Dubai’s premier position as a global hub for luxury retail and world-class leisure attractions,” said the company chairman Mohamed Alabbar.
According to Knight Frank, Emaar Malls’ 557,420 square metre portfolio accounts for about 18.5 per cent of Dubai’s 3 million square metres of shopping space.
The company plans to add another 1 million sq ft (92,900 sq metres), and 150 new brands, to The Dubai Mall this year.
In March, Emaar Malls reported that it had raised base rents at its properties by 25 per cent for renewals.
Low global oil prices and the strong US dollar, to which the dirham is pegged, is putting pressure on both domestic shoppers and tourists. Analysts say that they expect some shopping centre owners in Dubai to be forced to reduce rents in the coming months.
“We see rents near the top of our rental clock,” Andrew Williamson, the head of retail for JLL Mena said in March. “Sales are a function of rents and Emaar’s turnover rents also jumped significantly in 2015, meaning sales are still strong. Dubai Mall is as much about marketing as sales for many brands as it is a flagship destination for Dubai.”
lbarnard@thenational.ae
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