Damac widens Q1 losses to Dh190M
Increase mainly because it had yet to account for revenue from projects about to be completed
Damac Properties on Sunday reported a first-quarter net loss of Dh189.6 million, up from Dh106.1 million posted a year earlier, despite a pick-up in sales.
The Dubai-based property developer said the increase in losses was mainly because it had yet to account for revenue from projects about to be completed.
Gross profit fell to Dh139 million from Dh312 million a year earlier.
Revenues were down by almost half compared to the first quarter last year, falling from Dh1.2 billion to just over Dh642 million. Booked sales hit Dh1.1 billion while around 1,350 properties were delivered across Dubai.
“The compressed gross margins were due to revenue-mix and higher selling and general administration expenses resulting from higher booked sales reported during the quarter,” Damac said in a results presentation on its website.
Damac’s bourse filing on Sunday said it had suffered a short-term hit from the Covid-19 pandemic but it expects to have adequate resources to continue to operate for the foreseeable future.
Sales of ready villas and townhouses in Dubai jumped more than three-fold during the first quarter as residents sought more spacious homes amid the coronavirus pandemic, according to real estate portal Property Finder.
Close to 2,231 ready villas and townhouses were sold during the first quarter, compared to 673 units during the same period a year ago.
Areas such as Dubai Hills Estate, Palm Jumeirah, Arabian Ranches, Damac Hills and Jumeirah Village Circle, among others, registered higher sales of ready villas/townhouses, according to Property Finder.
In the first quarter, Dubai recorded the second-highest number of real estate transactions since February, with 6,590 deals valued at about Dh22.9 billion, a growth in number by 43 per cent and in value by 40 per cent year-on-year.
The real estate bulletin issued by the Dubai Land Department, Real Estate Updates for March, showed that transactions in the first quarter achieved a significant growth of 27 per cent and 47 per cent compared to the same periods in 2020 and 2019, respectively.
Highlighting the continued attractiveness of the real estate sector to new investors, the bulletin said 5,683 new investors entered the market in the first quarter, representing 64 per cent of the total number of investors during the same period.
“The figures revealed the continuity of achieving positive results in 2021, thereby continuing to enhance the trust of local and international investors in Dubai’s attractive and vibrant real estate environment,” the DLD bulletin said.
In its recently-released Residential Property Market Report for the first quarter, UAE-based real estate property agency Betterhomes said that the “worst is over” for Dubai’s property market, owing to a rise in prices since last summer.
The positive trends include a 12 per cent jump in the number of units transacted and a 19 per cent increase in the total value transacted in the residential market, according to the DLD.
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