Visitors at the Damac stand at Cityscape Global 2014 held at Dubai World Trade Centre in Dubai. Pawan Singh / The National
Visitors at the Damac stand at Cityscape Global 2014 held at Dubai World Trade Centre in Dubai. Pawan Singh / The National

Dubai developer Damac reports 46% profit rise despite property slowdown



Profit at Damac rocketed 46 per cent last year as the high-profile Dubai developer completed thousands of new homes despite the recent slowdown in the emirate’s real estate market.

Damac, which is known for signing licensing agreements with the likes of Fendi, Tiger Woods, Donald Trump and Paramount, and for offering customers buying its posh apartments yachts and luxury cars, said net profit grew to US$937 million last year from $641.5m the previous year.

The company, which began trading on the Dubai Financial Market in January after listing on the London Stock Exchange in 2013, reported that revenue for the year grew 64 per cent to $2 billion from $1.2bn the previous year.

Damac attributed the growth to the completion of 3,553 homes in eight projects during the period.

These included five apartment blocks in Business Bay – most of which were started before the global financial crisis – Lincoln Park on Umm Suqeim Road, two buildings of Lakeside at the International Media Production Zone, and its first international development, Al Jawharah in Saudi Arabia.

Land sales at Damac’s Akoya and Akoya Oxygen golf course-led housing areas also generated revenue of $873.5m – 43 per cent of total revenue – the company reported.

It added that advances from customers stood at just short of $2bn at the end of December, up from $1.71bn a year earlier.

The news comes as property analysts are predicting that real estate prices in the emirate will plunge by up to a fifth this year on the back of falling oil prices, the imposition of mortgage caps and higher transaction fees.

Last week, the real estate broker JLL and the ratings agency Standard & Poor’s put out pessimistic market predictions for the year, with S& P predicting that house prices could fall by as much as 20 per cent this year and JLL forecasting average falls of up to 10 per cent.

The Dubai Land Department last month reported that the value of property transactions last year fell 7.6 per cent compared with the previous year to Dh218bn as the market slowed at the end of the year.

But Damac remained upbeat in its assessment of the market.

“Against the backdrop of economic growth and a stabilisation of real estate prices in Dubai, we believe that Damac will continue to benefit from customer demand for our product,” said Hussain Sajwani, Damac’s executive chairman and chief executive.

Sebastien Henin, the head of asset management at The National Investor, said: “These were good results today that enabled Damac to outperform the rest of the market. However, the real question with Damac is whether it will be able to sustain this sort of performance going forward in an environment of falling real estate prices. The problem is that if oil prices continue to fall, investors may well postpone their purchases, which will make it harder for Damac and other real developers to sell.”

Holders of Damac’s London-listed global deposit receipts (GDRs) voted overwhelmingly to swap each GDR for about 23 ordinary shares on the Dubai Financial Market in January. However, a small percentage have so far remained trading in London after their owners elected not to swap them.

In a separate announcement, Damac said it was delisting from the LSE and cancelling the company’s GDRs. It expects to acquire remaining GDRs on or before March 16.

Damac shares closed up 6.84 per cent at Dh2.03.

lbarnard@thenational.ae

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Starring: Lakshya, Tanya Maniktala, Ashish Vidyarthi, Harsh Chhaya, Raghav Juyal

Rating: 4.5/5

MEDIEVIL (1998)

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Publisher: Sony Computer Entertainment
Console: PlayStation, PlayStation 4 and 5
Rating: 3.5/5

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Arrived in the UAE: 2007

Favourite place in Abu Dhabi: NYUAD campus

Favourite photography style: Street photography

Favourite book: Harry Potter

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Stars: Uma Thurman, David Carradine and Michael Madsen
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KEY DATES IN AMAZON'S HISTORY

July 5, 1994: Jeff Bezos founds Cadabra Inc, which would later be renamed to Amazon.com, because his lawyer misheard the name as 'cadaver'. In its earliest days, the bookstore operated out of a rented garage in Bellevue, Washington

July 16, 1995: Amazon formally opens as an online bookseller. Fluid Concepts and Creative Analogies: Computer Models of the Fundamental Mechanisms of Thought becomes the first item sold on Amazon

1997: Amazon goes public at $18 a share, which has grown about 1,000 per cent at present. Its highest closing price was $197.85 on June 27, 2024

1998: Amazon acquires IMDb, its first major acquisition. It also starts selling CDs and DVDs

2000: Amazon Marketplace opens, allowing people to sell items on the website

2002: Amazon forms what would become Amazon Web Services, opening the Amazon.com platform to all developers. The cloud unit would follow in 2006

2003: Amazon turns in an annual profit of $75 million, the first time it ended a year in the black

2005: Amazon Prime is introduced, its first-ever subscription service that offered US customers free two-day shipping for $79 a year

2006: Amazon Unbox is unveiled, the company's video service that would later morph into Amazon Instant Video and, ultimately, Amazon Video

2007: Amazon's first hardware product, the Kindle e-reader, is introduced; the Fire TV and Fire Phone would come in 2014. Grocery service Amazon Fresh is also started

2009: Amazon introduces Amazon Basics, its in-house label for a variety of products

2010: The foundations for Amazon Studios were laid. Its first original streaming content debuted in 2013

2011: The Amazon Appstore for Google's Android is launched. It is still unavailable on Apple's iOS

2014: The Amazon Echo is launched, a speaker that acts as a personal digital assistant powered by Alexa

2017: Amazon acquires Whole Foods for $13.7 billion, its biggest acquisition

2018: Amazon's market cap briefly crosses the $1 trillion mark, making it, at the time, only the third company to achieve that milestone

Our family matters legal consultant

Name: Dr Hassan Mohsen Elhais

Position: legal consultant with Al Rowaad Advocates and Legal Consultants.


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