Emaar Properties' sales surged to a record in 2nd quarter
Emaar Properties PJSC said sales surged to a record in the second quarter, helped by a recovery in Dubai’s real estate market and strength in its malls and hospitality businesses.
Property sales surged to 9.73 billion dirhams ($2.65 billion) in the quarter, growing seven times over the year-ago period, the developer said.
Revenue rose to 6.51 billion dirhams from 2.89 billion dirhams, while profit fell 17% to 903 million dirhams as a one-off gain wasn’t repeated.
“There is a broader recovery that’s taking place and we see improvement across the board,” said Yawar Saeed, an analyst at International Securities. However, he cautioned the rising cost of construction “could eat into some of the margins.”
Housing is riding an extended boom in markets around the world, with valuations soaring at the fastest pace since 2006, according to Knight Frank, and annual price increased in double digits.
Earlier this year, HSBC Holdings Plc said a growing demand for larger homes during the pandemic would further boost Dubai’s property market, echoing analysts at Morgan Stanley who expect the rally to last for “several years.”
Emaar was also helped by strong growth at its malls business, where revenue surged 74%. Emaar Malls said it had continued to see a steady recovery from the impact of pandemic and that retail sales for tenants had “significantly” recovered in the second quarter.
Factors including the return of tourists, the ongoing vaccination roll-out, the forthcoming Expo 2020 event will help drive further recovery, CI Capital analysts Sara Boutros and Marlene Milad said.
Net profit for the three months to the end of June rose to 304 million dirham ($82.7 million), compared with a 33 million dirham ($9 million) loss in the same period a year earlier.
Sales across Emaar Malls’ tenants were up 15 percent in the second quarter, compared to the same period in 2019, prior to the pandemic. The increase in sales during the first half of this year was largely driven by an increase in average spending per visitor, which rose 59 percent from the same period in 2019, the company said.
