RAK Properties posts 17% increase in third-quarter net profit

Work on the Bermuda Villas in Mina Al Arab is expected to before the end of this year.

RAK Properties reported a third-quarter net profit of Dh23 million, up 17 per cent from Dh19.6m a year earlier.

Net profit for the nine months through September stood at Dh74m, up 5.2 per cent compared to Dh71m in the same period last year. Total revenue for the period was Dh216m, up by almost Dh3m.

The company is constructing the Flamingo Villas in Ras Al Khaimah’s 30 million-square-foot Mina Al Arab development and has already sold 92 per cent of the units under development, according to a statement issued to the Abu Dhabi Securities Exchange. The properties will be ready by 2017, with prices ranging from Dh750,000 to Dh2.5m.

Its new residential project, Bermuda Villas, which comprises 2- to 6-bedroom villas and town houses in Mina Al Arab, is expected to break ground before the end of this year.

"RAK Properties will be announcing new projects in the residential and hospitality segments in line with market demand and expectations," said Mohammad Sultan Al Qadi, the company's chief executive.

Demand increased in RAK’s property market after prices in Dubai surged earlier this year. According to the listings website Dubizzle, renting a studio with a sea view in RAK costs an average of Dh20,000 a year, while a similar studio in Dubai’s Jumeirah Beach Residence can cost Dh90,000.

“In the property market generally, we’re seeing signs of a slowdown, given that you’ve had all these measures announced in Dubai to slow down the market,” said Sanyalak Manibandhu, an analyst at NBAD. “All of these things are working and I think we see this to be some sort of mid-cycle slowdown. You should see a recovery in prices going forward, [but] not in the near term. There is sufficient demand coming in to help prices go up again.”

RAK Properties' total assets stood at Dh4.64bn yesterday. The developer's shares on the ADX were up 3.53 per cent at 88 fils each.

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