Dubai luxury property developer Damac posted an 18 per cent increase in second-quarter profit and said demand for high-end property would remain strong, despite signs of a slowdown in the emirate’s wider real estate sector.
Damac made a profit of $253 million in the three months to June 30, while revenue rose 37 per cent to $556 million, according to a regulatory filing on Tuesday. It booked sales of $1.68 billion in the first half of 2014, up 75 per cent from a year earlier.
Property prices in Dubai fell by more half from a 2008 peak due to oversupply and Dubai’s debt crisis, but uprisings and unrest in other Arab countries led to an influx of money and people fleeing the strife, helping the emirate’s real estate sector mount a startling recovery.
Prices are back to around pre-crash levels, but consultant JLL said in a recent report that there had been a marked slowdown in the volume of residential sales in Dubai in the second quarter.
Damac’s larger rival Emaar Properties reported a slight drop in property sales in the three months to June 30.
“Customer demand for our luxury product remains high,” Damac’s chief executive Hussain Sajwani said. “We strongly believe that the current real estate market in Dubai remains sustainable, supported by a structural and ongoing supply-demand imbalance for high-end property.”
Damac listed its global depository receipts (GDRs) in London last December and also plans to offer investors the option of GDRs into ordinary shares that would be listed on Dubai’s main stock market.
Damac said it planned to pay an interim dividend of $0.25 per share.