Emaar Development remains upbeat in face of profit dip

A rendering of Dubai Creek Harbour, an Emaar project. (Supplied)
Updated 14 November 2018
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Emaar Development remains upbeat in face of profit dip

  • Dubai property market under pressure
  • Union Properties post Q3 loss

DUBAI: Property developer Emaar Development has said investor interest in its pipeline of residential projects remains “strong,” while posting a decline in net profit for the third quarter compared to the same quarter last year.
The company recorded a Q3 net profit of 682 million dirhams ($185.67 million), a 33 percent decline on the 1.02 billion dirhams recorded in the same time period last year, according to a filing on the Dubai stock exchange on Tuesday.
Over a nine-month period, Emaar performed well, with profits rising by 19 percent to reach 2.49 billion dirhams, compared to 2.1 billion dirhams recorded in the same time period last year.
The developer recorded 10 billion dirhams’ worth of residential sales in the first nine months of the year, and has a total sales backlog of 38.5 billion dirhams, which will be recognized as revenue in the next three to four years.
Emaar said it is readying to welcome its first residents next year to its Dubai Creek Harbour development.
This year it launched The Grand, a collection of luxury apartments and penthouses in Dubai Creek Harbour, as well as Socio and Collective, co-living spaces in Dubai Hills Estate, among other projects.
“The strong performance of Emaar Development underlines the strength of Dubai’s property sector, driven by the robust economic fundamentals of the nation,” said Mohamed Alabbar, chairman of Emaar Development and Emaar Properties, in a statement.
Alabbar’s comments come as other market commentators raise concerns about the future of the emirate’s real estate market.
While many hope the rebound in oil prices and the World Expo being held in Dubai in 2020 will reignite the property market, there are signs that property prices will remain flat for some time.
Damac Properties Chairman Hussain Sajwani said at the World Economic Forum event on Monday that 2019 will be “another difficult year,” Arab News reported on Monday.
According to real estate consultancy JLL’s Q3 Dubai report: “The residential market has continued to soften with single digit declines in both sale prices and rents during Q3 2018 despite recent government measures to inject confidence in the market by introducing 10-year residency visas for certain categories of retiree.”
It added: “The lack of new project launches at (the annual property event) Cityscape reflects the subdued investor sentiment and prices are likely to decline further over the next 12 months.”
Union Properties, the developer behind Dubai’s Motor City, also posted its third-quarter results on Tuesday, reporting net profit of 145.6 million dirhams for the first nine months, compared to a net loss of 2.3 billion dirhams in the same period last year.
The results mark a turnaround for the company, which saw its profits hit last year after management had to make provisions to cover previous accounting errors.
The company did, however, post a loss attributable to the shareholders of the company in Q3 of 61.8 million dirhams.


Head of Saudi Arabia’s SRC: ‘Ask banks for a mortgage, and we will refinance it’

Updated 25 April 2019
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Head of Saudi Arabia’s SRC: ‘Ask banks for a mortgage, and we will refinance it’

  • SRC CEO Fabrice Susini: One of our key objectives is to ensure that the banks are extending loans to more and more people
  • Extending home-ownership is one of the cornerstones of the Vision 2030 strategy to diversify the economy away from oil production

RIYADH: The head of the state-owned Saudi Real Estate Refinance Company (SRC) has made an unprecedented offer to the Kingdom’s home-seekers to underwrite future mortgages.
Speaking at the Financial Sector Conference in Riyadh, Fabrice Susini, SRC CEO, told the audience: “Ask them (the banks) for a mortgage, and we will refinance it.”
Although Susini later clarified his remarks to show that he still expected normal standards of mortgage applications to be met, the on-stage show of bravado illustrates SRC’s commitment to facilitate home-ownership in the Kingdom.
“Obviously if you have no revenue, no income, poor credit history, that will not apply. Now if you have a job, it is different. We have people in senior positions at big foreign banks that could not get a mortgage,” he explained.
He said that Saudi banks have traditionally assessed mortgages on the basis of “flow stability” of earnings. Government employees, or those of big corporations like Saudi Aramco and SABIC, found it easy to get mortgages “because you were there for life.”
“One of our key objectives is to ensure that the banks are extending loans to more and more people. The government is pushing for entrepreneurship, private development, private jobs. If you work in the private sector and cannot get a mortgage the next thing you will do is go to the government for a job,” Susini said.
Extending home-ownership is one of the cornerstones of the Vision 2030 strategy to diversify the economy away from oil production. Saudi Arabia has one of the lowest rates of mortgage penetration of any G20 country — in single digit percentages, compared with others at up to 50 percent.