Deyaar dismisses negative reports on projects
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Deyaar dismisses negative reports on projects

Deyaar dismisses negative reports on projects

Dubai-based real estate company Deyaar has issued a disclosure clarifying recent reports that most of its projects are on hold. Reuters quoted Deyaar's chief executive, Markus Giebel, as saying that many of the company's developments had been put on the back burner and that the current economic situation will continue to cause problems in the sector for a minimum of six months.

    However, countering the report, Deyaar issued a statement through the Dubai Financial Market – coinciding with the release of its 2008 financial statement – which stated that only future, unsold projects had been suspended to proactively protect the company's supply and demand pipeline.

    Spokespeople at the company were unavailable for comment to confirm just how many projects have been postponed or cancelled, and the prospective implications this could have for the year ahead.

    The company's management is keen to inspire continued confidence. Khaled Al Hashmi, the company's legal manager, said: 'Deyaar wishes to highlight that the company's strong record of property sales has continued despite the current and ongoing instability in the global financial system, which has had an impact on the real estate sector worldwide, including in the UAE.'

    Five projects to be delivered

    Giebel, who took over as CEO in mid-August following corruption probes involving the previous management, echoed this, saying, 'Despite challenging economic conditions globally, Deyaar remains focused on contributing to the sustained growth and continued stability of the real estate sector in Dubai and the wider region.'

    He added that the forthcoming year will see the company deliver five residential and commercial projects in Dubai of the 22 currently under construction.

    The company's strength to date is reflected in its 2008 financial report, which details full-year revenues of $809.4m, a 136% increase on 2007 results.

    Of this, $300.6m is recorded as profits, a year on year increase of 105%.

    'Our net profit more than doubled in 2008 and grew by 10% in the fourth quarter of 2008 despite growth challenges to the real estate sector at large,' commented Giebel.

    'We have witnessed consistent balance sheet performance throughout the year. With a view to strengthen the company's capital position even further, we have decreased our debt-to-equity ratio to 0.08%, enabling Deyaar to have one of the lowest debt ratios in the market.

    'We continue to remain well capitalised and have carefully reviewed the market to align our resources in line with areas where we see optimum potential and maximisation of shareholder value in 2009.'

    Under-served markets

    To ensure success in the coming, challenging year, Deyaar have expressed an interest in developing under-served markets internationally and to branch into middle-income housing alongside its high-end offerings.

    Turkey, Saudi Arabia and North Africa have been pinpointed as potential areas for growth.

    The company launched nine projects in 2008 and currently manages over 16,000 commercial and residential units. The group was established in 2002 and has a capital base of $1.6bn after its IPO in May 2007.

    Its executives anticipate ongoing profitability, despite high-profile merger talks at the end of 2008, controversial financial probes earlier in the year and the near evaporation of valuable overseas investors from the market.

    See also:
    Rera's rental price index in full
    Dubai rental increase law linked to Rera price index
    Dubai property prices to continue falling 'until Q3'

    AMEinfo Staff

    AMEinfo staff members report business news and views from across the Middle East and North Africa region, and analyse global events impacting the region today.

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