Retail and hospitality lift Emaar profits

Profits at Emaar Properties climbed 10 per cent year on year during the second quarter as Dubai's largest developer benefited from an increase in tourist numbers and rising property prices.

The developer of the world's tallest building and the biggest shopping centre yesterday posted net profits of Dh675 million for the three months to the end of June, up from Dh614m during the same period the previous year.

In a statement on the Dubai bourse yesterday, Emaar reported a 48 per cent increase in revenues to Dh3.1 billion from Dh2.1bn in the second quarter of 2012.

However, the company said net profits in total for the first half of the year stood at slightly above Dh1.2bn, just 1 per cent higher than the same period the previous year on the back of a 33 per cent increase in revenues to Dh5.2bn.

Nearly half of that was driven by Emaar's retail and hospitality arms, which accounted for first-half revenues of Dh2.3bn, while the company's international operations accounted for a further 10 per cent, with sales of Dh526m.

Emaar said that 38 million visitors flocked to The Dubai Mall during the first half of the year - an increase of 23 per cent compared with a year earlier. The company said average occupancy at its The Address Hotels + Resorts hotels stood at about 90 per cent for the first half of the year.

The company, which has announced a stream of new property developments so far this year including the 11 million square metre first phase of Mohammed bin Rashid City, added that the total sales value of its current property developments in Dubai at the end of last month stood at Dh6.3bn, nearly four times higher than the sales value of its schemes recorded in June 2012 that stood at Dh1.6bn.

"Our significant growth in the first half of the year is a strong reflection of the positive environment that our home market of Dubai offers by serving as a global business and leisure hub," said Emaar's chairman Mohamed Alabbar.

"The results were above consensus and offered investors another sign that the real estate recovery is under way in Dubai," said Sebastien Henin, a portfolio manager at The National Investor in Abu Dhabi.