Cities like Dubai will not 'disappear' because of challenges, but companies should 'work harder, smarter', according to chairman Mohamed Alabbar
Emaar Properties, Dubai’s biggest listed real estate company, is built to handle "quiet days" in the city’s property market, according to company chairman Mohamed Alabbar.
Speaking to Arabian Business, Alabbar said he is "realistic" over the state of the city’s property market, which has seen a fall in prices.
“The world [consists of] days and nights. We have summer and we have winter. We have cycles. Are you building your business and my business [as] realistic people [who know] there will be crazy days and quiet days? [Yes] but our business is built for it,” he said.
Cities like Dubai will not “disappear” because of challenges, Alabbar said, adding that companies should “work harder, smarter” during quieter days.
“Now, what do we do when it’s quiet days? We work harder, smarter and make sure we move on. That’s just life. You think that the city of London will disappear because of Brexit issues? You think Dubai will disappear because of something happening in the world? These cities cannot disappear, but are you planning long-[term]?
“You take care of your brand, I take care of my brand. This is really my answer to the property market,” he said.
Alabbar said both the Dubai real estate industry and Emaar Properties are “doing well”.
“How are we doing? We’re doing good. And my quarterly results show that. I can’t just tell you this and hide. I cannot hide right? You can’t hide. We’re a public company. No matter what I tell you, you see my quarterly results. You’ve seen our results [for] 2018, you see our results first quarter. I believe that we’re doing well. The market is doing well,” he said.
In February, a rally in Emaar Properties saw its shares climb 14%, marking its best month in three years. The recovery came following a 40% drop in 2018, the worst loss in a decade, which was led by investor worries over an increase in property supply at a time of falling demand in Dubai.
Emaar Properties also reported a 30% increase in net profit of AED7.216 billion ($1.965 billion) in 2018 over the previous year.
Revenue grew 37% to AED25.694 billion in 2018 when compared to 2017. In the fourth quarter alone, it rose 53% to AED8.304 billion, while net profit increased 34% to AED1.954 billion.
However, new research by real estate intelligence platform Cavendish Maxwell saw the average house price in Dubai drop 10.6% to AED2.6 million ($710,000) in February.
A report in the same month by S&P Global Ratings said property price declines in Dubai will continue in 2019 as values have already dropped close to levels last seen during a crash a decade ago.
An excess in supply has built up even as demand weakened, feeding what S&P is calling the market’s “long decline” that’s seen prices and rents drop by as much as a third since peaking in 2014.