RAK Properties’ Q2 profit jumps 279% as it prepares for project handovers

The developer behind the $2.72bn Mina Al Arab master development has set revenue target of $109m in 2021 as the market recovers from the pandemic

The Dh10bn Mina Al Arab development in Ras Al Khaimah. RAK Properties will hand over a villa project in the project this year. Satish Kumar / The National

RAK Properties recorded a 279 per cent rise in its second-quarter profit amid a broad recovery in the UAE property market, as the developer prepares to hand over two residential projects this year.

Net income for the three months to the end of June climbed to Dh55.7 million ($15.16m), according to a regulatory filing on Sunday to the Abu Dhabi Securities Exchange, where its shares are traded.

The developer behind the Dh10 billion ($2.72bn) Mina Al Arab master development reported revenue of Dh140.8m in the second quarter of 2021, up from Dh83.9m in the same period a year ago.

The company plans to hand over a villa project in Mina Al Arab and an apartment project on Reem Island in Abu Dhabi this year as it remains bullish about the growth prospects of the country's real estate market.

“The real estate market is on the verge of more exceptional performance during the coming period, with more projects to be delivered soon,” said chairman Abdulaziz Al Zaabi.

The UAE property market has softened on the back of a three-year oil price slump that began in 2014. Oversupply concerns and the Covid-19 pandemic added to headwinds in the subsequent years.

However, government measures to stem the spread of the pandemic, the coming Expo 2020 Dubai and growing demand for larger homes amid a rise in remote working has helped the market to bounce back.

Economic support measures and government initiatives such as residency permits for retirees and remote workers and the expansion of the 10-year golden visa programme have also helped to improve sentiment.

These measures have enhanced "the competitiveness of the country and [provided] an attractive investment environment”, Mr Al Zaabi said.

The company's first-half net income surged to Dh119.8m from Dh26.8m in the same period last year. Revenue for the period rose to Dh265.1m from Dh120m in the first six months of 2020.

RAK Properties set a revenue target of Dh400m in 2021 as the market continues to recover, its acting chief executive Mohammed Al Tair told The National in June.

The company is also developing two hospitality projects at Mina Al Arab – the InterContinental Hotel and Resort and the Anantara Mina Al Arab Hotel and Resort. The InterContinental hotel is scheduled to open in the fourth quarter of this year while the Anantara Mina Al Arab hotel will start operations next year, according to the company.

Both projects “will add significant value to the [company’s] revenue stream”, it said.

Ras Al Khaimah is aiming for a 20 per cent annual increase in visitor numbers this year, driven by easing border restrictions in the second half of the year and strong domestic demand, its tourism development chief, Raki Phillips, told The National earlier this year.