Dubai's Emaar Properties, builder of the world's tallest tower, reported a 86 percent drop in third-quarter revenues from apartment sales, as the Gulf emirate's property sector suffers.
According to the company’s financial statement posted on Dubai Financial Market on Sunday, the UAE’s largest developer by market value earned AED183.3m ($49.9m) income from apartment sales compared with AED1.34bn a year earlier.
However, its income from sale of villas grew substantially to AED126.4m, compared with AED30.4m in year-earlier period.
The company’s revenue from hospitality business grew 14 percent to AED224.5m
(from AED196.9), the statement revealed. Emaar's rental income rose to AED526m from AED435.7m, it added.
In October, the company reported a 34 percent drop in third-quarter net profit.
Emaar, which is the builder of the Burj Khalifa, made a profit of AED406m ($110.5m), compared with AED612.3m during the same period last year.
The developer, whose profits have dropped for the last five quarters, said it made a revenue of AED1.86bn in the third quarter.
Last week, Emaar Properties chairman Mohamed Alabbar said that Dubai's real estate will remain a "challenging" environment for two or three years but house prices are beginning to recover.
He also said he saw "optimism in the city" and confidence among consumers and the government, resulting in growth in key sectors of Dubai's economy.
He said in an interview on Bloomberg TV that tourism was experiencing strong growth while spending this year was up, adding that "things were looking good" for the emirate.
Speaking in London, the high-profile UAE businessman said Dubai's property market had been in the doldrums for three years but consumers and contractors had adjusted to the new global economic realities.
"Frankly, I think prices have stabilised and in certain pockets of the city, they are moving upwards gradually so it is all good news," he said.
Analysts remain concerned that the estimated 33,000 new homes scheduled to hit Dubai’s market by end-2012 could cause fresh declines in rental and sale prices.
Rating agency Moody's said last month that house prices are unlikely to recover until 2016.
Home prices in Dubai, the Gulf property market that had the biggest reversal because of the financial crisis, fell more than 60 percent in the wake of the global credit crunch.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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