Strong demand for its assets across the portfolio led to record revenue of AED2.2 billion ($600 million), up 10 percent year-on-year and 49 percent increase in net profit to AED1.1 billion ($300 million) for TECOM Group, the Dubai-based creator of specialised business districts.
The Group announced its results for the financial year ended 31 December 2023, which highlighted robust demand from new and existing customers operating across all six sectors, showcasing Dubai’s resilient economic performance and pro-growth and diversification government initiatives.
The AED2.2 billion revenue is the highest on record for TECOM, driven by elevated occupancy rates. As of 31 December 2023, the occupancy rate for commercial and industrial portfolio was 89 percent, a substantial increase from year-end 2022 occupancy rate of 86 percent. Lease of industrial lands witnessed a strong demand. Occupancy rate rose to 94 percent, compared to 81 percent during the year 2022.
Funds from operations (FFO) reached AED1.4 billion ($380 million), up 21 percent YoY on increase in revenue and improved collections.
EBITDA increased 23 percent YoY to AED1.7 billion ($460 million) with margins expanding to 76 percent (vs. 68 percent in 2022) on the back of improved revenue quality and positive impact from operational efficiency enhancements.
TECOM’s Board of Directors have proposed a dividend payment of AED400 million (8 fils per share, payable in April 2024), for the second half of 2023.
Malek Al Malek, Chairman of TECOM Group, said: “It was a remarkable year for the UAE and Dubai’s economy, supported by strong performance across several sectors including the commercial real estate sector. This has enabled TECOM Group to cement its position as the leading owner and operator of specialised business districts.
“In 2023, we continued to demonstrate the attractiveness of our assets and our ability to acquire new customers including major and market-leading global and regional companies. The Group delivered excellent financial results achieving record revenue and net profit and ended the year with a healthy liquidity position and robust balance sheet.
“We will continue to unlock greater value for our shareholders, thanks to our unique capabilities that enable us to capitalise on promising market opportunities within Dubai’s robust macroeconomic backdrop, underpinned by pro-growth government initiatives, including Dubai’s D33.”
Speaking on the increased demand for TECOM’s assets, Abdulla Belhoul, Chief Executive Officer of TECOM Group, said: “What drove occupancy rates to 89 percent across our portfolio was strong demand for assets in all sectors, especially those catering to customers in the industrial sector.
“We also witnessed a demand surge for customers requiring premium office spaces in centrally located districts, such as the Dubai Design District. While the majority of our revenue is attributed to retained customers, we are also pleased with an almost 15 percent increase in the number of new customers from 2022, including F&B manufacturer Nutridor, technology service provider Endava, global herbal health specialist Himalaya Wellness, pharma giant AstraZeneca, and globally renowned School of Jewelry Arts L’ÉCOLE.”
Belhoul added that TECOM anticipated the demand-induced growth momentum to be sustained in 2024 and beyond.
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