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Covid-19 impact: Dubai property likely to take up to 2 years to recover, says Damac chief Sajwani

Dubai - Damac’s 2020 loss widens to over Dh1 billion as sales slump because of Covid-19 pandemic

Damac Properties posted Dh1.04 billion (b) loss for the last financial year, as compared to Dh37 million (m) for the previous year due to slump in sales because of the Covid-19 pandemic.

Its revenues increased 6.2 per cent from Dh4.4b in 2019 to Dh4.67b last year, while booked sales stood at Dh2.3b in 2020 as compared to Dh3.b1 in 2019. It delivered 2,945 units in Dubai last year as compared to 4,700 homes in 2019.

The units were delivered in Akoya and Business Bay developments.

Damac chairman Hussain Sajwani said on Sunday that 2020 was tough for all the developers and Dubai property market would take about up to two years to recover.

“I anticipate it'll take at least 12 to 24 months to see a substantial recovery. 2020 was a very tough year for all property developers in the UAE and Damac felt the negative impact just the same,” he said in a statement.

“The lasting effects of Covid-19, which has devastated economies across the globe, has understandably impacted the profit margin at Damac. With global lockdowns, travel restrictions and the dip in global travel, Dubai’s property market has been adversely affected,” he said.

Real estate consultancy Asteco said sales prices and rental rates across Dubai remained in contraction in 2020, broadly in line with previous years, which were notably driven by pre-existing supply-demand imbalances.

Damac’s total assets fell to Dh21.1b by the end of 2020, as compared to Dh23.8b as of December 31, 2019.

Dubai’s largest private developer’s gross debt stood at Dh3.2b and cash and bank balances at Dh4.2b.

Its gross debt reduced by Dh650 million last year. Shareholders' equity stood at Dh13 billion at the end of December 31, 2020.

-waheedabbas@khaleejtimes.com