'Solid' demand for luxury property, says Damac
Firm delivers 577 units in Q1, expects to handover 4,000-5,000 in 2014
Dubai-based developer Damac has reported a 76% increase in operating profit for the first quarter of 2014 to $205mn (Q1 2013: $117mn) on the back of a 94% increase in revenues to $436mn ($225mn).
The company said that its higher turnover was due to the completion and handover of its Cosmopolitan and Water's Edge projects in the Business Bay area of Dubai and the sale of $173mn worth of land plots at the Akoya By Damac project.
The company, which last month successfully raised $650mn via a sukuk, said the continued recovery in Dubai's property market contributed to its strong performance as well as a substantial growth in net assets, which climbed by 32% during the quarter to $869mn.
Executive chairman Hussain Sajwani said: "We continue to see solid levels of demand in the luxury market, which is reflected in the growth in rental levels and residential values. We continue to look for suitable new land parcels ensuring we can provide supply to meet demand."
He added that IMF forecasts for Dubai predict GDP growth of 4.5% for this year, which he said would sustain demand for residential, hotel and leisure space.
"We have responded to this by re-weighting our development portfolio to include a greater proportion of hotel and serviced hotel apartment projects, which now represent 40% of our total pipeline.
"Having successfully closed a $650mn sukuk we are well capitalised to increase our land bank. The outlook in our markets remains positive, and we are well on track to deliver strong results to our shareholders."
Damac said that it had also made progress with construction on existing schemes.
At the four-tower Damac Towers by Paramount project, all upper ground floors slabs are cast and the building has reached level three of its podium, while at Akoya By Damac, contractors are working on villas and low-rise apartments, as well as on its substation and utilities.
The Trump International Golf Course is expected to be ready by the first quarter of 2015.
In total, Damac handed over 577 units during the first quarter of 2014 and it expects to deliver 4,000-5,000 units this year.