Damac puts up strong numbers ahead of Dubai Financial Market listing

The jacuzzi area of one of flats at Damac Maison, a block of 355 serviced apartments in Dubai. Satish Kumar / The National

Damac recorded a strong second quarter ahead of its listing on the Dubai Financial Market, and predicted it would deliver more than 4,000 properties by the year's end.

The company recorded US$819 million in off-plan sales, up 32 per cent year-on-year.

This comes as a resurgence in enthusiasm for real estate in Dubai encourages developers to sell properties off-plan – a practice that some criticised as fuelling the 2008 crash.

Hussain Sajwani, the founder and chief executive of Damac, said: "customer demand for our luxury product remains high, and we strongly believe that the current real estate market in Dubai remains sustainable, supported by a structural and ongoing supply-demand imbalance for high-end property."

Net income rose 18 per cent to $253.3m in the three months to June.

Revenue grew by 37 per cent to $556.1m from $407.3m, driven by the completion of Damac’s first project outside the UAE.

The handover of Al Jawharah in Saudi Arabia, a luxury apartment complex, earned Damac $196.1m. The company earned an additional $260m from sales within the UAE.

Second quarter sales costs grew to $254.1m from $136.3m.

The company’s cash-flow situation improved, with net cash increasing to $1 billion, up from $814m in the previous quarter.

Harshjit Oza, an analyst at Naeem Brokerage, wrote in a research note: “Damac [is] a growth story, given its Dubai exposure and a promising pipeline of projects within the high-end residential and hospitality sectors.

“We expect real-estate demand in Dubai to continue being resilient and view Damac as a key beneficiary.”

Mr Oza pointed out that a bit more than a third of the company’s forthcoming projects focused on Dubai’s “promising” hospitality sector.

Damac bought 55 million square feet of land from Dubailand for $513m earlier this month to boost its land bank, it said.

This was funded by the April issuance of a $650m, five-year sukuk.

The company launched a number of hospitality projects in the first half of the year, including Damac Maison Dubai, a complex of high-end hotel apartments in April, and Naia Jebel Al in June.

Damac announced last month that it would list on the Dubai Financial Market.

The company already lists its global depository receipts (GDR) on the London Stock Exchange. Investors can convert these to ordinary equity until September 2.

With a conversion rate of approximately 23 shares of common equity to one GDR, investors have flocked to buy GDRs in a bid to make arbitrage gains. The company’s GDRs have increased in price by about 16 per cent since the announcement. The GDRs rose 2.02 per cent late morning yesterday to $17.64.

Damac will continue to list GDRs on the LSE, meaning that it will continue to comply with London’s stricter filing requirements.

With a market capitalisation of $3.5bn, the company will be among the DFM’s ten largest.

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