Dubai’s biggest listed developer Emaar Properties reported more than a threefold increase in first-quarter net profit on higher sales revenue, as UAE’s property market continues to rebound from the coronavirus pandemic.
Net profit attributable to owners of the company for the three-month period to the end of March climbed to Dh2.24 billion ($610 million), the company said in a statement to the Dubai Financial Market, where its shares are traded.
Revenue during the period jumped 12 per cent to Dh6.6bn. Group property sales rose 17 per cent to Dh8.3bn amid the continuing recovery in Dubai's property market.
“This performance is a testament of the … overall recovery of the economic activities in Dubai led by the real estate market,” Emaar said.
Dubai's property market has made a strong recovery from the pandemic-driven slowdown as the UAE's economy improves, helped by fiscal and monetary measures.
The market registered 25,972 property transactions in the first quarter of this year, the highest number of quarterly deals since 2010, according to Mo’asher, the emirate’s official sales price index issued by the Dubai Land Department in partnership with Property Finder.
Residential property prices in Dubai grew 10.6 per cent last year and a further 2.6 per cent during the first three months of 2022, Knight Frank said in a report this week.
The latest increase leaves values more than 11 per cent higher than in the same period of 2021, marking the highest rate of annual growth since January 2015.
Emaar also recorded a rise in international real estate operations, with sales up nearly 22 per cent annually to Dh1.47bn in the first quarter. Revenue of Dh989m from the business also contributed to 15 per cent of the company's total revenue, backed by operations in Egypt and India, Emaar said.
Overall, its property sales backlog of Dh45.2bn at the end of the first quarter will be “recognised as revenue in the future”, the company said.
“We have increased our share in key markets of Egypt and India, capturing the strong increase in demand in these economies,” Mohamed Alabbar, founder of Emaar Properties, said.
“Going forward, Emaar will also continue to capitalise on the very attractive supply and demand dynamics in hospitality and shopping malls, which have recorded a solid performance in the first quarter of this year.”
Emaar Development, the build-to-sell property development business majority-owned by Emaar Properties, reported a 34 per cent rise in its first-quarter profit to Dh1.05bn as property sales grew 16 per cent to Dh6.8bn. Revenue during the period dropped 7 per cent to Dh3.5bn, it said in a statement to the DFM.
In March, Emaar Properties said it planned to increase its stake in Emaar Development “by up to 3 per cent”.
Emaar's shopping malls and retail arm also reported higher profit during the first quarter. Emaar Malls’ net profit rose 136 per cent to Dh636m as revenue grew 36 per cent to Dh1.2bn.
The hospitality, leisure, entertainment and commercial leasing businesses of Emaar recorded 120 per cent annual growth in revenue to Dh843m as average occupancy in its managed hotels stood at 80 per cent during the period.
“Emaar is well positioned to efficiently implement its clearly defined strategy and to generate attractive and sustainable returns for all stakeholders,” Mr Alabbar said.
“The future growth and long-term shareholder value will be laid by digital transformation, new product innovation and market penetration.”