RAK Properties swings to Q2 profit on higher revenue

The company aims to invest in strategic acquisitions and maintain a ‘robust liquidity position’ to support long term growth, its chief executive says

RAK Properties' Mina Al Arab development in Ras Al Khaimah. Satish Kumar / The National

RAK Properties swung to a second-quarter profit on the back of higher revenue as UAE’s real estate sector rebounds strongly from the coronavirus pandemic.

Net profit for the three months to the end of June climbed to Dh43.5 million ($11.84 million), compared to a loss of Dh4.9 million during the same period last year, the company said on Thursday in a statement to the Abu Dhabi Securities Exchange, where its shares are traded.

Revenue during the period surged nearly 192 per cent annually to Dh253 million.

“We are witnessing enthusiastic demand from both local end users and international investors driving our sales across the board,” Sameh Al Muhtadi, chief executive of RAK Properties said.

“Looking ahead, we have an exhilarating period in store, with multiple launches to be announced in the coming months.”

Founded in 2005, RAK Properties is developing the Dh10 billion Mina Al Arab master development off the coast of Ras Al Khaimah as well as other projects in the emirate.

The company’s first-half profit surged more than three times to Dh88.19 million as revenue more than doubled to Dh511.64 million. The company had assets worth Dh6.34 billion at the end of June.

“Our primary focus remains on driving transformational projects within existing locations across Ras Al Khaimah, where we have further developments planned that align with our dedications to RAK’s Vision 2030,” Mr Al Muhtadi said.

“As we steadfastly pursue growth opportunities, we are committed to investing in strategic acquisitions and maintaining a robust liquidity position to support our long-term growth strategy.”

The UAE’s property market rebounded strongly from the coronavirus pandemic with property transaction numbers increasing across the country.

Pent-up demand and improved investor sentiment as well as new initiatives, such as visas for retirees and the expansion of the 10-year golden visa programme, have helped to drive property sales up.

RAK Properties also has a project in Abu Dhabi and all released units at the Julphar Residence apartment building on Reem Island were sold out with more than 75 per cent of sold units being handed over to the customers, it said.

Beachfront residential buildings in Ras Al Khaimah are receiving strong demand including at Bay Residences, located on Hayat Island in Mina Al Arab master development, it added.

At Bay Residences Phase 1 all units are sold out and both towers are under construction, with development on track according to the plan.

Units at Bay Residences Phase 2, comprising 324 apartments are also fully sold out with construction continuing.

The company is also constructing Anantara Mina Al Arab Hotel and Resort, Ras Al Khaimah, its second 5-star luxury hotel, which is set to open this year.

“We are excited for the future of our luxurious hospitality collection, with The InterContinental Resort & Spa proving to be very popular and delivering excellent revenue, and we expect that the opening of the … Anantara Resort & Spa in the fourth quarter will significantly enhance RAK Properties recurring revenue streams adding considerable appeal to our overall hospitality offering,” Mr Al Muhtadi said.

“Design is also almost complete on a serviced apartment project, the construction of which will commence in the last quarter of 2023. These assets add significant value to revenue streams, strengthening the balance sheet, while also driving the appeal of Mina Al Arab as a lifestyle destination in Ras Al Khaimah.”

The company aims to surpass last year’s profitability on the back of higher sales, Mr Al Muhtadi told The National in an interview in June.