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Damac full-year profit up 30% despite Q4 dip

Damac full-year profit up 30% despite Q4 dip

Dubai property developer said the market could return to growth this year

Dubai property developer Damac saw a 12 per cent fall in Q4 net profit to Dhs 844m, down from Dhs 959.3m a year earlier according to Reuters calculations.

The company recorded a full-year net profit increase of 30 per cent to Dhs 4.51bn, up from Dhs 3.48bn in 2014, and said it had maintained a healthy net cash position of Dhs 5.74bn. Revenue stood at Dhs 8.54bn.

Damac said it completed 2,600 units last year, including some at master development Akoya and 512 at its first project in Qatar.

“The Dubai real estate market is at a consolidation point in the cycle and the rapid growth witnessed in 2012-2014 is now behind us,” said chairman Hussain Sajwani. “However, this market creates opportunities for well capitalised and experienced companies like ourselves with a strong track record.”

He added that supply in Dubai did not exceed 8,000 units last year, despite some consultants predicting 25,000 additions.

Company managing director Ziad El Chaar criticised property consultants last year for giving unrealistic predictions of market supply. Earlier this year, he also said he would resign if predictions that Dubai property prices would fall 10 per cent this year came to pass.

Sajwani stressed that market conditions were very different to the property crash in 2008. Stakeholders had learnt their lesson, he said.

“Importantly for the real estate market, a high single digit rental yield, amongst the healthiest in any major metropolitan centres globally, should continue to support investment demand. Ultimately, developers who have the capabilities to target healthy pockets of demand, and who can offer a portfolio of products to satisfy said demand would fare better.”

The Damac chairman said he expected supply in Dubai this year to fall short of 10,000 new units, driving the market back into positive growth territory towards the second half of 2016 or early 2017.

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