Deyaar plans to launch Dh1.5bn project in Dubai by end of year

Company expects 15 to 20 per cent revenue growth next year amid the UAE's real estate boom, CEO says

Chief executive Saeed Al Qatami says Deyaar is aiming to expand to the northern emirates as the UAE's property market remains buoyant. Reem Mohammed/The National

Dubai-listed Deyaar Development plans to launch a Dh1.5 billion ($408 million) project in the emirate by the end of this year and expects revenue growth of 15 to 20 per cent in 2025 amid a boom in the UAE’s real estate sector.

The project in Dubai Production City will have more than 1,000 units and will be completed in two years, Deyaar’s chief executive Saeed Al Qatami told The National.

“There is still demand and we don’t see demand reducing. A lot of interest among people [for property], not only in Dubai, but in other emirates as well, " he said. “Wherever I have travelled in the last six months, whether in the US or Europe, a lot of people are interested in moving to Dubai."

Government initiatives, stability and growth in the economy are encouraging more people to relocate to the UAE, he added.

The announcement of the new project comes after Deyaar unveiled its first residential project in Abu Dhabi this week. The Dh800 million project, Rivage, is on Al Reem island and includes more than 300 one, two and three-bed room units. Prices start at Dh1.2 million.

The UAE property market has been booming in recent years on the back of government initiatives such as residency permits for retired and remote workers and the expansion of the 10-year golden visa programme. Overall growth in the UAE’s economy due to diversification efforts is also supporting the property market.

Deyaar reported a third-quarter profit after tax of nearly Dh140 million. Pawan Singh/The National.

During the third quarter, average prices in the Dubai residential market rose close to 20 per cent year-on-year, underpinned by a 19 per cent rise in average apartment prices and a 23 per cent increase in average villa prices, according to a report from CBRE.

Abu Dhabi’s average apartment prices registered a year-on-year increase of nearly 9 per cent and average villa prices grew by more than 8 per cent during the same period.

The Abu Dhabi market is “very attractive and we’ve seen the amount of supply that is going to come in Abu Dhabi in the next three years is not that as much as we have launched in Dubai", Mr Al Qatami said.

In the first three quarters of this year, 1,442 apartments and 593 villas were completed in Abu Dhabi, representing 22.8 per cent of the expected residential pipeline for the whole of 2024, according to a recent report from ValuStrat. Scheduled project completions for 2024 total 8,907 residential units.

Deyaar also plans to launch more projects in Dubai next year and is looking at opportunities in the Northern Emirates as part of its expansion plans, Mr Al Qatami said.

The new projects will be funded through its own resources, but the company will approach banks to borrow if required. “We have good liquidity of close to Dh1.8 billion” to fund new projects, the chief executive said.

The company’s cash and bank balances stood at Dh1.77 billion at the end of September, up from Dh1.33 billion at the end of December, according to its third quarter financial statement. Borrowings stood at close to Dh453.6 million, while the total assets reached Dh6.75 billion at the end of September, up from Dh6.5 billion at the end of December.

The company this week reported a third-quarter profit after tax of nearly Dh140 million, up more than 17 per cent annually as revenue rose 21 per cent to Dh376 million.

Deyaar expects its profit for the whole of this year to be higher than 2023, and anticipates annual revenue growth of 15 to 20 per cent in 2025, as it continues to sell more homes, Mr Al Qatami said.

In February, it launched a Dh700 million project in Dubai’s Jebel Ali, after launching Rosalia Residences in Al Furjan in January, which has sold out.

Demand is matching supply in Dubai's residential market currently and, while more supply is expected next year, "I don’t think that will bring the market drastically down but it will stabilise”, Mr Al Qatamai said.

There has been a lot of interest from customers in India, the Far East, Europe and Turkey to buy property in Dubai, he added.