Emaar Properties PJSC (EMAAR), the developer of the world’s tallest tower in Dubai, said revenue from apartment sales plunged 85 percent last year. Sales of villas climbed 85 percent during the period.
Income from apartment sales dropped to 1.11 billion dirhams ($303 million) from 7.56 billion dirhams a year earlier, according to Emaar’s financial statement posted on Dubai’s stock market today. Revenue from the sale of villas rose to 959 million dirhams from 517.3 million dirhams. Emaar posted a 27 percent decline in full-year profit on Feb. 14 and provided a breakdown of revenue today.
Dubai’s housing market is hitting bottom after a boom led by speculators collapsed in 2008, causing prices to drop by more than 65 percent. Villas are now attracting more interest than apartments, which dominate Dubai’s market, as rental yields on villas tend to be higher.
“Incoming supply remains substantial and it remains premature to call a broad recovery in the residential sector, regardless of recent demand trends in terms of villas and apartments,” said Mohammad Kamal, a Dubai-based analyst at Arqaam Capital. “If prices improve 0.5 percent in a specific district, that doesn’t mean the broader sector is improving.”
Emaar, which is 31 percent owned by Dubai’s government, plans to pay a 10 fils dividend for 2011.
The company said the money owed by Amlak Finance PJSC (AMLAK), the mortgage lender being reorganized by the United Arab Emirates’ government, was lowered last year to 595 million dirhams from 712 million dirhams a year earlier. The amount is unsecured and earns an average return ranging from 3.13 percent to 4 percent a year, compared with 4 percent to 4.5 percent in 2010, it said.
Amlak, in which Emaar owns 45 percent stake, had its liabilities cut by 4 billion dirhams after it sold land and reached agreements with some creditors, the United Arab Emirates’ Economy Minister Sultan Bin Saeed al-Mansouri was cited as saying in a statement posted on the ministry’s website last week.
Emaar’s shares have gained 17 percent this year. Fifteen analysts recommend investors buy Emaar shares, two have a hold rating and one a sell recommendation, according to data compiled by Bloomberg.
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