RAK Properties reports higher profit as revenue grows
The company expects higher recurring revenues once Mina Al Arab hotels open
Developer RAK Properties reported a 22 per cent increase in net profit for 2020 on higher revenue.
The company declared a net profit of Dh113.5 million ($30.9m) as revenue grew 25 per cent to Dh243.5m.
"RAK Properties completed and handed over [the] Gateway Residence project in Raha Island, Mina Al Arab, and recognised the revenue," managing director Mohammad Al Qadi said in a statement to the Abu Dhabi Securities Exchange, where its shares trade.
"During this year, RAK Properties also sold plots of land in our Al Marsa project."
Mina Al Arab is the company's flagship Dh10 billion development consisting of a pair of islands off the Ras Al Khaimah coast. A pair of new resort hotels – a 350-room Intercontinental and a 306-room Anantara property will open this year and next, respectively, the developer said.
This will "improve the overall revenue stream" by providing recurring income once opened.
The company expects to hand over the Marbella Villas project at Mina Al Arab containing 205 villas and townhouses, including some waterfront properties, this year. Its Julphar Residence project containing 266 apartments on Abu Dhabi's Reem Island is also due for handover in 2021, the company said.
RAK Properties sold Dh156m of properties during the year, whose revenues will be recognised over the construction period, and total assets increased 3.6 per cent by year-end to Dh5.6bn, which the company said was due to investments made in the development of hotels and residential properties.
Average rents for prime apartments in the emirate ranged from Dh18,000 per year for a studio to Dh54,000 for a three-bed property, consultancy Cavendish Maxwell said in its latest UAE property market report.
"The emirate is also ramping up its entertainment and tourism offerings in a bid to attract visitors and investors," the report said.
Like other emirates, Ras Al Khaimah's hospitality market was impacted by movement restrictions to limit the spread of Covid-19, which led to a decline in the number of tourists, but a stronger performance is expected this year.
Occupancy at the emirate's beach hotels fell 41 per cent to 44 per cent last year, but is set to bounce back by 38 per cent to 61 per cent this year, according to a Mena Hotel Forecasts document published in December by Colliers International.
Updated: February 21, 2021 01:40 PM