Dubai Developer Emaar's Apartment Sales Sag 85 Pct In 2011
Dubai's Emaar Properties , developer of the world's tallest building, said revenue from villa sales and its rental and hospitality units rose last year but this was not enough to offset an 85-percent drop in apartment sale earnings.
March 25, 2012 3:59 by kippreport
The Gulf’s largest listed developer said apartment sales tumbled to 1.1 billion dirhams ($299.5 million) last year from 7.6 billion dirhams in 2010. Its 2010 earnings had been buoyed by the handover of much of the units in Burj Khalifa, the world’s tallest tower.
Emaar posted a 27-percent drop in 2011 profits last month but quarterly profits doubled. It published its full results on Sunday.
On Sunday, Emaar said villa sales jumped 85 percent to 959 million dirhams in 2011 while sales of commercial units and land plots more than doubled to 2.7 billion dirhams. Leasing revenue rose 12 percent to 2.14 billion dirhams.
Hospitality revenue from its malls and hotel business was up 25 percent at 1.22 billion dirhams over the same period.
Total revenue fell by a third to 8.1 billion dirhams in 2011, from 12.15 billion dirhams in 2010.
House prices in Dubai have tumbled about 60 percent from a 2008 peak and no turnaround is expected this year, with supply continuing to outstrip demand.
The property bust has hit developers. Dubai government-owned Nakheel was forced into a $16 billion restructuring, while shares in Emaar – 31 percent owned by the Dubai government – have plunged 81 percent in just under four years.
Sunday’s results also showed Emaar is owed 595 million dirhams by troubled mortgage affiliate Amlak, down from 712 million dirhams in 2010.
“The group’s management believes the loan from Amlak is fully recoverable,” Emaar said.
Emaar values its 48-percent stake in Amlak at 724 million dirhams. The mortgage firm’s shares have been suspended since November 2008.
On Tuesday, the federal government said it had cut Almak’s debt by $1.1 billion.
Emaar’s provisions for “doubtful debts” owed to it were 127 million dirhams in 2011, up from 85 million a year earlier.
The developer’s shares were down 0.3 percent at 0845 GMT on Dubai’s bourse. (Reporting by Matt Smith; Editing by Amran Abocar)