DUBAI: Damac, the Dubai developer behind a portion of the emirate’s glitziest property projects, revealed a widening first-quarter misfortune as deals practically divided.
The developer registered a Q1 loss of 189.6 million dirhams ($51.6 million), in comparison to a loss of 106.1 million dirhams in the year before. Revenues fell by about half to about 642.2 million dirhams, it said in a stock exchange filing.
Dubai property developers have registered a recovery in demand for high-end properties in recent weeks as sales activity in the secondary market increased. But at the same time, off-plan deals under pressure.
S&P provided in March that it expected Dubai’s GDP growth to regain while real estate remained squeezed.
“We expect real estate companies’ profitability to remain under pressure and leverage to be high,” said S&P Global rating credit analyst Sapna Jagtiani. “Absent a substantial recovery in revenue, companies are likely to focus on cost optimization, proactively managing their liquidity, and preserving their cash flows. Rated Dubai-based real estate companies still have good liquidity and access to funding, however, despite currently trying times.”