Dubai Developers Suffer as Aldar Holds Steady in Abu Dhabi

The Burj Khalifa skyscraper, center, stands on the city skyline beyond new skyscrapers under construction in Dubai, United Arab Emirates, on Tuesday, Sept. 12, 2017. Dubai residential property prices and rents are set to fall further as losses of high-paying jobs and dwindling household incomes boost vacancies across the city, according to Phidar Advisory. Photographer: Tasneem Alsultan/Bloomberg

(Bloomberg) —

The fortunes of property developers in Dubai and Abu Dhabi diverged last year.

Dubai’s Emaar Properties PJSC reported a 58% slump in profit, while Damac Properties PJSC posted its second consecutive full-year loss — underscoring the impact of an oversupply aggravated by the coronavirus pandemic.

Aldar Properties PJSC in neighboring Abu Dhabi, however, performed better than Emaar and Damac. It posted a profit that was almost unchanged from a year ago as it benefits from government contracts.

A property glut and faltering demand have driven Dubai home prices down by more than 30% since the market peaked seven years ago, a decline made worse by the pandemic. The government last year set up a committee to manage supply and demand, while property developers temporarily halted new projects.

Emaar 2020 Numbers:

  • Net income 2.62 billion dirhams vs 6.2 billion
    • Estimate 2.87 billion dirhams
  • Revenue 19.71 billion dirhams vs 24.6 billion
    • Estimate 18.34 billion dirhams
  • Founder Mohamed Alabbar: “Looking ahead to 2021, we see a world of opportunities — both traditional and technology-driven — that will help us grow in ways and in markets that didn’t exist five to 10 year ago”
  • Link to statement
  • Emaar shares +6.8% this year

Damac 2020 Numbers:

  • Loss 1.04 billion dirhams vs loss of 37 million
    • Estimate loss of 904 million dirhams
  • Rev. 4.67 billion dirhams vs 4.4 billion
    • Estimate 4.43 billion dirhams
  • Chairman Hussain Sajwani: “2020 was a very tough year for all property developers in the United Arab Emirates and Damac felt the negative impact just the same”
  • “I anticipate it will take at least 12 to 24 months to see a substantial recovery”
  • Link to statement
  • Damac shares -4.6% this year

Aldar 2020 Numbers:

  • Profit 1.932 billion dirhams vs 1.925 billion
    • Estimate 1.88 billion dirhams
  • Rev. 8.4 billion dirhams vs 7.1 billion
    • Estimate 7.95 billion dirhams
  • Group CEO Talal Al Dhiyebi: “Aldar’s powerful performance in 2020 has set the tone for a new phase of sustainable growth. We have adopted a new operating model to propel the company to the next level in terms of scale and breadth of activity and to meet our ambitious sustainability targets”
  • Link to statement
  • Aldar shares +18% this year

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