- Emaar doing well because of balance sheet, business management
- Dubai can adapt to changing demand, Emaar Chairman Says
Emaar Properties PJSC is having a better year than in 2015, Chairman Mohamed Alabbar said, even as Dubai struggles to emerge from its most recent property downturn.
“If you ask me about Emaar’s numbers, I don’t see any pull back,” Alabbar told reporters on Sunday after a press conference for the start of a $1 billion skyscraper that will exceed the height of the Burj Khalifa, currently the world’s tallest building. “2016 for us is surprisingly better than 2015 and the balance between supply and demand is very encouraging.”
Dubai’s housing market, the biggest and most volatile in the Middle East, is struggling as falling oil prices, weaker currencies in Europe and Russia and an abundance of properties damp demand. Apartment sale prices dropped 1.9 percent in the first quarter, while villa prices rose 1.6 percent, Phidar Advisory said this month.
Emaar is doing well because the company has a strong balance sheet and is managing its business “tightly,” Alabbar said. “To do well, you have to go long term, you have to believe in your customer and believe in the market.”
Emaar’s profit rose 24 percent in 2015 to 4.08 billion dirhams ($1.1 billion). The shares gained 2.2 percent in Dubai on Sunday, bringing the decline for the past 12 months to about 15 percent. That compares with a drop of about 9 percent for the emirate’s benchmark index.
Chief Executive Officer Abdulla Lahej left and Chief Operating Officer Amit Jain is looking after his responsibilities, the company said after the end of trading on Sunday.
Dubai, the Gulf’s tourist and business hub, is developing hotels and entertainment projects as it seeks to attract 20 million tourists a year by 2020 from 10 million in 2012. Emaar’s new tower within the Dubai Creek Harbour project will have an observation deck, gardens and 18 to 20 floors available for shops, restaurants and other tourist facilities, Alabbar said.
Property cycles are “natural” and Dubai can adapt to changing demand, Alabbar said.