UAE's RAK Properties Q4 profit plunges 74%

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DOWN TURN: RAK Properties lost 60.81m dirhams in fair value of investments in 2008. (Getty Images)

RAK Properties posted a near 74-percent drop in fourth-quarter profit to 50.9 million dirhams ($13.86m), the latest United Arab Emirates property developer to suffer during a real estate downturn.

RAK Properties, based in the UAE emirate of Ras Al Khaimah, said it lost 60.81 million dirhams in the fair value of investments in 2008, compared with a profit of 29.38 million a year earlier.

It also booked a provision for impairment of 58.86 million dirhams for the year, it said in a statement on the Abu Dhabi bourse website, without giving details.

The UAE's once-booming real estate sector is going through a price correction that has seen the average cost of residential real estate fall by about a quarter in Dubai since late last year.

Emaar Properties of Dubai posted a loss in the fourth quarter, while Abu Dhabi developers Aldar Properties and Sorouh Real Estate saw profits tumble 85 percent and 90 percent, respectively.

RAK Properties's full-year profit fell to 379.46 million dirhams from 496.23 million dirhams in 2007, the company said, without giving quarterly data, which Reuters calculated from previous financial statements.

RAK Properties earned 193.92 million dirhams in the fourth quarter of 2007 and 328.52 million dirhams in the first nine months of 2008. (Reuters)

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READERS' COMMENTS

What is future of Ras Al Khaimah Property
Posted by ki on Sunday 22 February 2009 at 15:51 UAE time

The issue with Ras Al Khaimah Projects is their inflated value (price). Even with distress sales (negative premiums) there are no buyers today. Will all the luxury projects launched be completed & will RAK deliver the lifestyle buyers have paid for.

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