Revenue from Emaar’s hotels and rental properties rose by nearly a sixth during the first three months of the year, offsetting a nearly 17 per cent fall in villa revenue.
Revenue from hotels increased 15.8 per cent to Dh483 million from Dh417m last year, as the company benefited from Dubai's buoyant hospitality market conditions, Emaar reported in an earnings statement to the Dubai bourse yesterday.
Rental income from Emaar’s leased properties of homes, shops and offices continued to make up the largest chunk of revenue, rising 15.2 per cent to Dh863.4m from Dh749.2m during the same period last year.
Money from apartment and land sales rose slightly by 2.8 per cent to Dh653m from Dh635m.
But revenue from villa sales fell to Dh257m compared with Dh308.7m last year.
Last month the company reported that total group revenue increased by 7 per cent to Dh2.25 billion and net profits of Dh863m.
Emaar revealed plans in March to sell up to 25 per cent of its retail and malls division in a stock offering at a value of up to US$2.45bn. The company added that it could also list “other relevant subsidiaries”, which could include its lucrative hotels division.
Emaar launched a number of major schemes during the first three months this year These include BLVD Crescent — a development of 300 apartments located in two linked 39-storey and 21-storey towers — and the second phase of Mulberry at Park Heights in Mohammed bin Rashid City, comprising 330 apartments.
Villa projects launched by the developer include more than 450 homes at the Arabian Ranches development. The company also launched off-plan sales for its second serviced residence project under the Vida brand in Downtown Dubai.
“We remain positive long-term as we believe Emaar’s recurring income still has further to grow, with Dubai strengthening its position as the Mena region’s tourism hub,” wrote Muneeza Hasan, an equity analyst for real estate and consumer research for the Middle East and Turkey at JP Morgan.
“On the property development front, project launches in Dubai have been well-received given the strategic locations of Emaar’s projects and the company’s strong brand name,” she added. “Given the availability of land in Dubai and newly signed joint-venture agreements with Dubai developers, we expect Emaar to continue adding in a measured way to its Dubai pipeline and expect the contribution of Dubai residential projects to rise in the overall property development pipeline.”
Emaar's stock sank 4.1 per cent yesterday to close at Dh10.45, which analysts put down to profit-taking by retail investors who had been keen to cash in on the stock being included in the MSCI index.
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