Emaar Malls to recover outstanding rents

Emaar Malls recorded a net profit grew three per cent to Dh1.021 billion in the first half of 2017.

Emaar Malls, an arm of master developer Emaar Properties, is pursuing cases worth Dh37.34 million against tenants - mostly food and beverages - to recover outstanding rents.
The company's first-half financial statement showed that as at June 30, 2017, legal proceedings were in progress against certain tenants to recover outstanding rents amounting to Dh37.34 million as against Dh9.47 million at the end of December 31, 2016.
"The legal cases are an accumulation over the years, with legal procedures tending to take a long time for resolution. There were accounts receivables which were slow to resolve through negotiation over the past year. One particular case of 2015 was ruled by the court and resurfaced in 2017 due to tenant non-performance," an Emaar Malls spokesperson said in a statement to Khaleej Times.
The fluctuation in amounts over the quarters are within reasonable range with respect to the company's revenue as an integral part of its collection process, the spokesperson added.
Emaar Malls recorded a net profit grew three per cent to Dh1.021 billion in the first half of 2017. It reported Dh1.624 billion revenue during the January-June 2017 period compared to Dh1.618 billion in the same period last year.
The company disclosed that most of the cases "related to standalone food and beverages operators mainly within community retail centres, and small businesses that are new to retail."
The statement said that the group meets the tenants on a regular basis (monthly) to understand their business and inquire on how it can support them.
"For tenants that are going through a difficult situation, we pre-empt them early to refine their business model, reduce their overheads or plan for an exit. For tenants facing cashflow difficulty, we normally accommodate deferment within a reasonable basis. Legal is only our last resort if we cannot reach an amicable resolution," the spokesperson said in a statement to this newspaper.
Replying to a query about whether Emaar Malls is planning to revise down rents for tenants in trouble, the spokesperson said: "We do in situations such as for newly-opened project where the surrounding shopper base is still immature; and for tenants if we find their products have long-term value which is yet to be realised."
The firm, nevertheless, sees some of the cases coming to a resolution in the coming periods.
The company distributed 10 per cent of its share capital, equivalent to Dh1.301 billion, as cash dividend to its shareholders earlier this year.
- waheedabbas@khaleejtimes.com