Damac to deliver 5,000 homes

Damac Real Estate Development, a Dubai-based developer, is expecting to deliver between 4,000 and 5,000 units in 20014, as net profit jumped by 79 per cent in the first quarter 2014.

Net profit for the quarter stood at $210 million compared to $117 million in the corresponding period last year, the company said in a regulatory filing on London Stock Exchange.

Booked sales more than doubled year-on-year to $864 million in the first quarter, the developer said, adding 577 units were completed and delivered in the first quarter, with estimated total deliveries between 4,000 and 5,000 units this year .

JLL, a global real estate consultancy, expects nearly 20,000 new units being completed in 2014. HSBC Global Research, however, expects supply of 90,000 new units by 2018, but states the market will absorb the new supply "fairly easily" due to the increase in population across the emirate.

Damac’s cash flow generated from operations grew to $308 million compared to $41 million in Q1 2013, driven by higher booked sales resulting in increased cash collection from customers during the quarter.

 “The continued economic recovery in our core market of Dubai has supported strong sales in the first quarter of 2014,” said Hussain Sajwani, Executive Chairman, Damac.

"Dubai is forecast to see continued economic growth as stated by the International Monetary Fund anticipating that the economic growth in the UAE is expected to remain strong at 4.5% in 2014. This growth will sustain demand for further residential property, both from owner occupiers and in the rental market, as well as for hotel and leisure space.”

Sajwani added they had reviewed their development portfolio to include a higher proportion of hotel and serviced hotel apartment projects, which will now represent an estimated 40 per cent of their total pipeline.

"Having successfully closed a $650 million sukuk we are well capitalised to increase our land bank, allowing us to capitalise on the strength of the Dubai market. The outlook in our markets remains positive," he added.

Top global consultancies have ruled out a price correction in the Dubai residential market, with some experts pegging price rise at 10 to 15 per cent this year.

 

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