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Dubai; A sizeable land bank on tap, which can deliver an additional 1,500 upscale residential units as and when needed, bodes well for Damac Real Estate Development Ltd.’ s prospects this year. For 2014, the developer recorded a set of robust numbers including a net profit gain of 46 per cent to $937 million ($641.5 million in 2013) built on revenues of $2.009 billion (Dh7.379 billion), up 64 per cent from $1.22 billion.
The gains were led by the delivery of 3,553 units across eight projects as well as plot sales at the two flagship Akoya master-developments, which fetched a further $8735 million, or just over 40 per cent of gross revenues. Gross margins settled in at 58.5 per cent. The stock was up 6.8 per cent to close at Dh2.03 on Monday. The completion of its GDR share swap was done on January 9 and it got listed on DFM on January 12.
Having access to a sizeable land bank will be crucial for Dubai’s master-developers. In the second half of last year, Damac spent $513 million on acquiring the land that would be used for the second Akoya project, while another $86 million was used to pick up land elsewhere.
“The strong increase in recognised revenues during the year highlights the successful delivery and sale of land and units across a number of projects,” said Hussain Sajwani, Executive Chairman and CEO, who also sees benefits accruing from the current state of stability in Dubai’s property values.
“We have a firm belief in Dubai’s fundamentals and see the market maturing and growing in the short to medium term. “There is nowhere else on earth that is driving the kind of yields we are seeing in the Dubai market, including London, Paris and Singapore.”
Advances from customers weighed in at under $2 billion as of December 31 last, up from the $1.71 billion a year ago. Booked sales for 2014 were up 28 per cent to $3.1 billion from $2.5 billion, driven in the main by the launch of Akoya Oxygen along with those made at in-progress projects. The overall pipeline now totals 38,000 units with an estimated project value of $19.5 billion. The debt on its books totalled $719.6 million, up from 2013’s $85.3 million. The increase stems from the $650 million Sukuk issued in April last year, a five-year at a coupon of 4.97 per cent annually. Total assets were $5.12 billion, a gain of 68 per cent over 2013, led by an increase in cash and bank balances and increase in development properties.
“The figures for 2014 show how far Damac has come over the last 12 months — outperforming a strong market and solidifying our position,” Sajwani said. “Our growing hospitality arm and retail offering [The Drive at Akoya] add another dimension.”
Source: Manoj Nair, Associate Editor, gulfnews.com