Dubai’s largest, totally non-public actual property developer posted on Sunday its first yearly loss since turning into a publicly traded firm, a worrying signal for the sheikhdom’s already reeling important property market that’s been hit with the fallout from the coronavirus pandemic.
Damac Properties, which has enterprise ties to US President Donald Trump and hosts the Mideast’s solely Trump branded golf course, reported a lack of $10 million in 2019 off revenues of practically $1.19 billion.
That’s in comparison with a $313 million revenue in 2018 off revenues of $1.16 billion. The corporate grew to become publicly traded in 2013.
In an announcement posted to the Dubai Monetary Market inventory alternate, Damac chairman Hussain Sajwani praised Emirati leaders for working towards stabilising the economic system.
“Thanks to the reform oriented leadership of this country, the market is poised for a long-term upswing,” Sajwani mentioned.
That optimism could also be belied by the financial repercussions of the brand new pandemic, which has halted world journey.
Dubai Worldwide Airport, the world’s busiest for worldwide journey, largely has shut down, together with many non-public companies.
Damac’s 2019 outcomes didn’t present the influence of the coronavirus outbreak which started in January, although a be aware on the finish of its 56-page monetary outcomes talked about it as a “subsequent occasion”.
It mentioned Damac “will take necessary measures to safeguard” the pursuits of shareholders, with out elaborating.
Dubai has seen a boom-and-bust actual property market since permitting foreigners to purchase property in 2002. Values have dropped by a 3rd since 2014, when Dubai introduced it will host Expo 2020, or world’s honest, starting this October.
Now, flats, villas and workplace areas stand empty, and extra properties are because of come onto the market within the coming years. Dubai’s authorities arrange a fee to give you methods of heading off the issue even earlier than the pandemic struck.
Late Saturday, world rankings company S&P introduced it lowered its ranking for Damac from B+ to B over the outbreak and the Covid-19 sickness it causes.
It additionally lowered its rankings for the Dubai actual property juggernaut Emaar Properties, of which the sheikhdom’s sovereign wealth fund owns a couple of third.
The rankings company mentioned it anticipated the autumn in residential costs in Dubai will likely be steeper than beforehand anticipated, with “adverse trends” stretching into 2021.
“The outbreak of Covid-19 is adding to the strain on Dubai’s already weak real estate market,” S&P mentioned.
