RAK Properties defiantly upbeat despite subdued first-half show

Dubai: RAK Properties expects full-year profit to grow by up to 5 per cent despite a muted first-half performance, the company’s top executive said.

“We are very positive [of growth] between 3-5 per cent,” Mohammad Sultan Al Qadi said.

RP  had a 1 per cent year-on-year growth in the first six months to total Dh51.62 million. The Abu Dhabi bourse-listed developer had a 2.37 per cent profit growth to Dh150.6 million in 2013.

Al Qadi cited company policy for the muted half-year growth numbers, and insisted cash was there. RP does not declare revenue linked to properties where the keys have not been collected by the customer.

Undeclared revenue appears to represent a major stumbling block for the company with Al Qadi hinting at substantially higher growth numbers had customers taken up those keys. However, he declined to state the amount of revenue currently tied to property where the keys had not been handed over.

On the back of full-year growth expectations, Al Qadi said RP will look to enter the hospitality segment in 2015 as part of a joint venture to bring new hotel brands to the northern emirates.

Al Qadi hinted the developer was in the middle of discussions with a partner to enter the hospitality segment. However, he stated the process had “not concluded”.

RAK Properties seek to bring in a mixture of mid- to high priced hotels to the emirate as part of the joint venture deal. However, despite the hospitality plans, the developer’s core focus will be on luxury villas by the seaside as well as apartment and office buildings, according to Al Qadi. He also said plans to enter the retail segment remains shelved until further notice, citing sufficient existing supply in the emirate.

The company has enough cash and has no immediate plans to raise capital. However, Al Qadi hinted that the company could go to the debt market to raise capital in the next 18 months to fund some of the larger projects.

It will continue to restrict its market footprint to its home emirate, with Al Qadi saying the company would be better positioned to stretch its geographical reach in five year’s time.

See related story: RAK Properties retains upbeat profit tone in first quarter

Source: Alexander Cornwell, Staff Reporter, gulfnews.com


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