Emaar Properties opened the world’s tallest tower yesterday, marking the completion of the last of its big local landmark projects and the start of a new strategy which is expected to focus on overseas projects, hotels and hospitals.
“We will be focusing on our subsidiaries — hospitals and hospitality — which will create a lot of revenues for Emaar and also work on wherever we have started projects (overseas),†Issam Galadari, chief executive of Emaar Dubai said.
Emaar, 31.2 percent owned by the Dubai government, is the Arab world’s largest listed developer, but is less indebted than other Dubai property firms, with about DH8.1bn ($2.21bn) of loans and borrowings outstanding as of September 2009 of which about half is due this year. Last year it posted a 53 percent rise in third-quarter net operating profit to DH655m, beating most analysts’ forecasts, on higher sales of its high-end properties. Revenue in the third quarter was DH1.95bn ($531m). The performance contrasted with that of troubled compatriot Nakheel which has seen earnings collapse and its liabilities rise to $20bn.
Following yesterday’s opening the $1.5bn Burj Khalifa, tower’s first residents are due to move in next month. Emaar’s chairman, Mohammed Alabbar, said 90 percent of the properties in the tower have been sold, the firm is set to get a 10 percent yield on its investment and the completion will boost earnings in 2010. “It will have a positive impact on the first, second and third quarters of this year,†Alabbar said while standing at the foot of the 828-metre high tower.
Roy Cherry, Vice-President of research for real estate and construction at Shuaa Capital said he expected Emaar’s 2010 revenue to approach DH10bn, implying a growth of about 25 percent on the investment bank’s 2009 forecast.
Emaar’s shares are down 74 percent since hitting a 21-month high on January 6, 2008 as Dubai’s once booming real estate sector crashed with property prices falling by around 50 percent. Its shares closed down 3.4 percent at DH4.02 yesterday.
