Dubai’s Deyaar feels benefit of resurgent rental market

Deyaar said that its property and asset management arm had added 2,600 new homes and offices mostly in Abu Dhabi, Dubai, Sharjah and Ajman, to its portfolio in 2013.

Deyaar Development grew the number of properties it was managing on behalf of landlords by more than 10 per cent last year as it benefited from a resurgence in the Dubai rental market.

Dubai’s second largest listed property developer, by market capitalisation, said its property and asset management arm had added 2,600 new homes and offices mostly in Abu Dhabi, Dubai, Sharjah and Ajman, to its portfolio in 2013.

The addition brings Deyaar’s total properties under management to 20,369, which last year produced a gross rental income of more than Dh650 million, Deyaar said in a stock exchange filing.

The company said that all the new properties were owned by local landlords and managed by Deyaar.

“The real estate market in the UAE is growing exponentially yet again and we have witnessed a surge in interest for our services,” said Rashid Abdulla Al Haji, the vice president of property and asset management at Deyaar.

Jones Lang LaSalle, the property broker, estimates residential rents in Dubai rose 17 per cent during 2013 as the emirate's property market recovered from the global financial crisis.

The company, which was initially formed as the property management arm of Dubai Islamic Bank and then spun off as a private property company floated on the Dubai Financial Market, developed homes and offices in the Business Bay area of the city that has taken longer to recover from the crisis than other parts of Dubai.

Deyaar, which was hit hard by the downturn, announced in 2011 that it would switch its focus from property development to growing its property and facility management operation.

But in recent months Deyaar has indicated it plans to move its focus back towards further Dubai development.

Last month it announced it had sold its 50 per cent stake in a joint venture in Turkey, Alarko Deyaar Gayrimenkul Gelistirme, to a subsidiary of Alarko Holding in a bid to shift its focus towards opportunities in Dubai and to reinvest the proceeds from the sale into its pipeline of projects in the emirate.

The company also said it plans to allow foreigners to begin investing in its shares and to hold up to 25 per cent of its share capital.

Earlier this month Deyaar announced net profits for 2013 of Dh154.5 million – up from Dh38.6 million in 2012.

Deyaar shares yesterday rose 3.2 per cent to close at Dh1.29. The company’s stock has gained 27.7 per cent this year.

“Over the last few years we have seen a number of developers following this strategy of persuing lettings rather than sales,” said Sebastien Henin, the head of asset management at The National Investor. “It makes sense when the market is doing badly to secure a more stable income. But now that the market is rising we would expect to see Deyaar pursuing more development opportunities.”

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