Deyaar Expects To Shrug Off A Decline In Property Values

Deyaar Development expects to shrug off a decline in Dubai property values, beat last year’s profits, and seek a rating to help it fund new projects, the company’s chief executive, according to Marcus Giebel. The company is on track to outperform 2007’s net profit. Deyaar reported a net profit of 410 million UAE Dirhams ($111.7 million) last year and presently has in excess of Dh25 billion worth of projects under construction and in the pipeline, mostly in the United Arab Emirates. Marcus said, he expected earnings before interest, tax, depreciation and amortisation, or Ebitda, to grow by 30 per cent this year, despite a sales slump, job cuts and tightened bank lending for home buyers.But concerns over the health of Dubai’s property industry and an ongoing investigation into alleged corruption at Deyaar that led to the arrest of its former chief executive continue to hit the company’s shares.

The CEO observed that the developer has started to see the effects of the slowdown in Dubai’s real estate boom. “We haven’t seen any payment defaults but people are negotiating to find solutions.” Home sales in Dubai have been constrained by banks and mortgage lenders shutting off access to finance in the last few months amid rising fears of defaults. Islamic mortgage lender Amlak Finance, now part of Emirates Development Bank, has stopped lending completely. Offering buyers new payment options is one solution that Deyaar is considering to keep homes selling. Shares in the company that’s traded on the Dubai Financial Market are down 76 per cent this year to Dh0.69 last week, (Thursday) a bigger drop than the 68 per cent fall in the market’s general index over the same period. From an income statement and balance sheet perspective, Deyaar is perfectly positioned to face the storm and to capture opportunities that may arise at the end of the storm.

Al Seef 11 Residential Project. Meanwhile, Deyaar has announced that it will handover all residential units at Al Seef II to home owners in December. The company also organised an orientation programme to advise all home owners on the handover process ahead of the scheduled delivery. An orientation programme in the lead-up to the delivery of Al Seef II further underscores Deyaar’s continued commitment to providing our customers with best international quality and service experience and its strict adherence to stipulated time-frames. A programme of this nature is an essential practice followed by leading global developers. It provides customers the opportunity to understand the exact documentation procedure for the final handover as well as the facilities management contract and amenities provided at the project. Despite global challenges to the stability of the financial order, Deyaar is focused on continuous business growth and the development of iconic communities. While being positioned in one of Dubai’s most prestigious and sought-after locations, Al Seef II stands out for its unique architecture and the unparalleled world-class lifestyle it provides, he added. Our strategy now is to go to the basics and fundamentals,” he said. “We have to check our cash positions, stress test our portfolio through an in-house crisis monitoring committee, and finally evaluate opportunities when they arise.