• Home
• /
• Local business

Deyaar on Track to Meet’09 Profit Goals

DUBAI — Dubai real estate developer Deyaar Development is on track to meet its profit goals for 2009 despite a 73 per cent drop in its first quarter net profit, its chief executive officer said.

Markus Giebel said the company still expects its net profit for the year to approximate its earnings of Dh540 million in 2007. In 2008, Deyaar’s net profit stood at Dh1.08 billion.

“Our first quarter results were within our expectations; it was a positive quarter if you consider the current situation,” said Giebel, adding that 2008 “for the most part” was an exceptionally good year.

Before the global financial crisis abruptly halted the property boom in Dubai, property prices in the emirate soared to their peak levels 
in September.

To adjust to the property downturn, Deyaar has put some of its property projects on hold, reducing prices on select projects, and refunding its customers who made partial payments on some of their projects.

Giebel said the company will launch in the next three weeks the first tranche of a Dh1-billion “distressed asset fund” that Deyaar will use to acquire some of its distressed assets, while also keeping an eye on other distressed assets outside of the company.

The first Dh500 million is being raised largely through subscriptions of local and overseas investors, he said.

Deyaar had said previously that it was setting up a fund wherein customers who can no longer pay for contracted properties can surrender their assets to the fund. Deyaar will then rent out these properties to generate cash flow during the downturn, and re-sell these properties when property prices have improved.

Giebel said despite difficult market conditions, Deyaar intends to deliver seven projects this year.

Afram Kouz, Deyaar vice-president for projects and engineering said the company has already completed a Dh300 million, 41-storey office tower, The Citadel, at the central business district of Business Bay.

He said the office tower has been completed since August of last year, but the property developer is still waiting for the master-developer Dubai Properties to complete the infrastructure for the tower, including access roads, water, electricity and cooling systems.

Kouz said that by June, the Dh150-million, 18-storey residential tower, also in Business Bay Hamilton will also be completed.

Giebel said Deyaar will also look into new markets abroad, including Saudi Arabia and other key growth areas in the region. — rocel@khaleejtimes.com