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Emaar builds on investor sentiment
Property developer doubles its revenue from housing and land sales.
August 13, 2013 12:34 by Muhammad Aldalou
As investor sentiment toward Dubai’s real estate market continues to improve, Emaar Properties has announced the doubling of its revenue from housing and land sales in the second quarter of the year.
The emirate’s largest property developer and builder of the world’s tallest tower, the Burj Khalifa, has managed to sell a series of projects this year, cashing in on renewed optimism in the property market, reports Reuters.
Generating revenue of AED1.63 billion in the second-quarter (ending June 30), Emaar also reported a 10 per cent increase in its net profit in July.
To date, Emaar has handed over 36,600 units including some 20,900 apartments and 15,700 villas.
In April, hundreds of buyers queued outside Emaar’s head office as the real estate developer put 188 off-plan houses on sale.
At the time, Craig Plumb, head of research at Jones Lang LaSalle, said the “frenzied sale” gave a false sense of the true strength of the market.
He added: “This kind of publicity will, in some ways, scare people off from other markets who might start thinking that we are going back to the situation we had in 2006 and 2007.”
In its semi-annual report released in July, the Dubai Land Department announced that funds invested in the emirates’ real estate market had reached AED53bn, with Emiratis ranking highest among Gulf investors.
The statistics also revealed a 111 per cent increase among Arab investors, a 57 per cent increase among Gulf investors and a 73 per cent increase among all foreign investors.
As Kipp reported last month, the International Monetary Fund (IMF) had warned Dubai that it “might need to intervene” to prevent another boom-and-bust cycle. At the time, Harald Finger, IMF mission chief to the UAE, said that it was “too early to speak of a bubble”, but that action needs to be taken with real estate prices increasing at the current rate.
Finger explained that property prices in the emirate have risen by 35 per cent from roughly a year ago and, should they continue to surge, one suitable step might be to introduce fees on the real estate market activity.
The Dubai Land Department is currently in the process of introducing seven new legislations over the next two years. The exact laws and regulations are yet to be announced, but it is understood that implementing them will help regulate the real estate market and protect it from harmful practises and speculation.