Emaar net profit surges 33% to Dh7.8b Amid Strong UAE Property Market Growth

Emaar Properties, Dubai's largest listed developer, has reported a significant 42% year-on-year increase in net profit for the first nine months of 2023, reaching Dh8.2 billion ($2.2 billion), buoyed by strong sales in the UAE’s robust property market. The company announced these results in a statement to the Dubai Financial Market on Thursday.

The group's property sales surged by 16% to Dh31.1 billion, reflecting the continued demand for real estate in Dubai. Despite the rise in sales, Emaar’s revenue for the period saw a slight 3% decline, totaling Dh18.4 billion. However, the company's revenue backlog from property sales remained substantial, standing at Dh69.5 billion as of September 30.

“Our financial performance, underscored by recent credit rating upgrades, reflects our strategic investments and their ensuing returns,” said Mohamed Alabbar, the founder of Emaar. In June, S&P Global Ratings upgraded Emaar Properties' long-term issuer credit rating from “BBB-” to “BBB,” with a stable outlook, anticipating more robust business performance.

Dubai’s property market has seen a strong rebound from the pandemic-induced slowdown, bolstered by government initiatives and a growing economy. The Dubai Land Department reported 116,116 new property transactions valued at Dh429.6 billion in the first nine months of 2023, marking a 33.8% increase in transactions and a 36.7% rise in value compared to the same period last year.

The third quarter of 2023 saw a 19% year-on-year increase in average residential property prices in Dubai, with a 5% rise compared to the previous quarter, according to Knight Frank. The consultancy predicts that property prices will continue to rise into the next year.

Emaar Development, the company’s majority-owned subsidiary focused on build-to-sell projects, reported a 25% increase in property sales, reaching Dh28.9 billion. The subsidiary’s revenue for the period was Dh7.4 billion, while its earnings before interest, taxes, depreciation, and amortization (EBITDA) grew by 36% to Dh4.5 billion.

In the retail sector, Emaar’s shopping malls, retail, and commercial leasing operations generated Dh4.3 billion in revenue, achieving an impressive average occupancy rate of 97% across its mall assets.

Emaar's international real estate operations, contributing over 11% to the company’s total revenue, recorded Dh2.2 billion in property sales and Dh2.1 billion in revenue, driven primarily by strong performances in Egypt and India.

The company’s hospitality, leisure, and entertainment divisions also performed well, generating Dh2.5 billion in revenue, up 22% from the previous year. This growth was supported by a robust recovery in the tourism sector and strong domestic spending, with Dubai welcoming 8.55 million international visitors in the first half of 2023, surpassing pre-pandemic levels.

Emaar’s UAE hotels, including those under management, reported an average occupancy rate of 70% in the first nine months of 2023. Overall, recurring revenue from Emaar’s malls, hospitality, leisure, entertainment, and commercial leasing activities rose by 26% annually, reaching Dh6.8 billion.

As Dubai’s property market continues to thrive, Emaar Properties remains a key player, capitalizing on the ongoing growth and demand in the region.