Emaar reveals social housing drive

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STRATEGY SHIFT: Emaar plans to launch a budget housing unit to accommodate low income residents. (Getty Images)

Dubai developer Emaar Properties plans to launch a social housing unit in a bid to cater to the region's low-income residents, its chairman has said.

Speaking on the sidelines of the World Economic Forum (WEF) in Sharm El Sheikh, Mohammed Alabbar said the developer planned to acquire a company specialising in social housing that could launch projects in Morocco, India, Pakistan, Egypt and the Palestinian territories, reported the UK's Financial Times (FT) newspaper.

The move is a shift in strategy for Emaar, which has so far concentrated on luxury projects such as the exclusive $20 billion Downtown Burj Dubai development.

Emaar, the largest Arab real estate company by market value, has $100 billion of projects under development.

As its home market matures, the company has sought markets in the Middle East, North Africa and Asia to find fresh sources of revenue.

“We have been blessed but you have to do more. We might only get a 3% margin but if we are good citizens we can't just take profit, we have to be able to stand tall in front of our children,” Alabbar told the FT.

The Gulf's oil-fuelled investment boom has filtered across the Middle East and North Africa, but some still fear the wealth gap between the Gulf and the rest of the region continues to grow.

Emaar, which has started social programmes around its property development on Lombok island in Indonesia, is also considering a development in Jakarta for a self-contained district around a skyscraper, mirroring the residential and commercial zone under construction around Burj Dubai, the world's tallest tower.

Alabbar said Emaar' s Indian joint venture, Emaar MGF, would continue to expand across the subcontinent after it withdrew plans for an initial public offering (IPO) in February.

Alabbar said the firm would continue to invest in the region, with Yemen the next Arab country expected to host an Emaar development.

“We should double or triple our size across the region,” he said.

Last month Emaar posted its second decline in profit in three quarters as revenue stagnated, and marketing and selling costs rose.

Net income in the three months to March 31 fell 3.8% to 1.66 billion dirhams ($451 million), or annualised earnings per share of 1.08 dirhams, compared with 1.72 billion dirhams in the year-earlier period.

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