Tecom Group, the operator of business districts that are home to more than 10,000 companies, reported a 13 per cent rise in its first-half profit, driven by high occupancy rates and solid growth in the Dubai economy.
Profit for the six months to the end of June rose to Dh484.5 million ($131.9 million), from the same period last year, underpinned by strong top-line performance, continued growth across all business segments, improved operational efficiencies and lower total financing cost, Tecom said in a statement on Wednesday to the Dubai Financial Market, where its shares are traded.
First-half revenue increased by an annual 6 per cent to Dh1.05 billion, buoyed by continued growth in rental rates, sustained strong occupancy levels and high customer retention rates across its business districts.
Earnings before interest, taxes, depreciation and amortisation (ebitda) for the January-June period were up 14 per cent year-on-year to Dh824.5 million on the back of improved management of operating expenses and better operational efficiencies, the company said.
“Commercial real estate in Dubai is growing at a steady pace owing to Dubai’s appeal as a global city to businesses, talent and investors alike and to its macroeconomic resilience,” said Abdulla Belhoul, Tecom Group's chief executive.
“Our robust business model and our business districts’ market reputation have enabled Tecom Group to capitalise on the strong demand, supporting our solid performance during the period. The vast majority of our leased assets, especially Grade A centrally located offices, have recorded high occupancy rates.”
Tecom comprises 10 business districts including Dubai Internet City, Dubai Media City and the Dubai Design District. Nine of Tecom's 10 business districts are located in free zones that permit 100 per cent foreign ownership, with tenants including Meta, Google, Visa, BBC, CNN, Unilever and Dior.
The company's board of directors approved the distribution of an interim cash dividend of Dh400 million for the first half of 2023, which will be distributed in September, according to the filing.
The occupancy level for commercial and industrial assets was 87 per cent as of June 30, registering a 5 per cent increase year-on-year, while overall customer retention rate stood at 92 per cent at the end of June.
Tecom recorded an 18 per cent year-on-year increase in the number of customers during the first half of 2023, exceeding 10,000 that include multinational and regional companies.
Tecom is "seeing strong demand for the central business district, which reveals that customers prefer high-quality offices in a prime location," Mr Belhoul said in a media call on Wednesday.
The company is also recording "strong interest" from multinationals seeking to expand into the region and higher demand for co-working spaces, he said.
The outlook for Dubai's commercial real estate market is "promising" as demand continues to exceed supply with new projects coming to the market, he added.
Net profit in the second quarter of 2023 dipped 3.3 per cent to Dh229 million from the same period a year earlier.
However, net profit for the three-month period increased by 19 per cent year-on-year to Dh283 million, excluding the impact of the one-off expense related to settling an old loan facility, the company said.
The existing Dh7.6 billion loan facility was refinanced at lower margins and more favourable terms, leading to an improved loan-to-value ratio of 15 per cent, it said.
Quarterly revenue increased 6 per cent year-on-year to Dh535 million.
The results come as Dubai's economy rebounds strongly from the coronavirus-induced slowdown, supported by the travel and tourism sector and its rapidly improving property market.
Dubai's economy expanded by 4.6 per cent on an annual basis in the first nine months of 2022, with wholesale and retail trade accounting for 24.1 per cent of its gross domestic product, according to data from the emirate's statistics centre.
The emirate's economy is estimated to have grown 5 per cent last year and is forecast to increase by 3.5 per cent in 2023, according to Emirates NBD.
"Tecom Group continued to deliver strong financial and operational performance owed to our dynamic strategy which aims to further increase our occupancy levels across the portfolio while also maintaining prudent capital management. Our performance was underpinned by Dubai’s robust economy," Malek Al Malek, chairman of the company's board, said.
The UAE's property market registered a strong performance across all sectors in the first half of the year amid robust growth in its non-oil economy despite global macroeconomic headwinds, consultancy CBRE said in a report this week.
The total number of office rental contracts registered in Dubai's occupier market reached 29,932 in the second quarter of 2023, up 41.6 per cent from the same period a year ago, according to data by the Dubai Land Department.
Over this period, a total of 20,953 new rental registrations were recorded, marking a 58.5 per cent year-on-year growth.
"We are confident in our ability to sustain occupancy levels for the remainder of the year while also focusing efforts to drive further efficiencies to sustain the strong ebitda margin," Mr Belhoul said.
The specs
Engine: Long-range single or dual motor with 200kW or 400kW battery
Transmission: Single-speed automatic
Max touring range: 620km / 590km
Price: From Dh250,000 (estimated)
The specs
- Engine: 3.9-litre twin-turbo V8
- Power: 640hp
- Torque: 760nm
- On sale: 2026
- Price: Not announced yet
Specs
Engine: Electric motor generating 54.2kWh (Cooper SE and Aceman SE), 64.6kW (Countryman All4 SE)
Power: 218hp (Cooper and Aceman), 313hp (Countryman)
Torque: 330Nm (Cooper and Aceman), 494Nm (Countryman)
On sale: Now
Price: From Dh158,000 (Cooper), Dh168,000 (Aceman), Dh190,000 (Countryman)
More from Rashmee Roshan Lall
Mercedes-AMG GT 63 S E Performance: the specs
Engine: 4.0-litre twin-turbo V8 plus rear-mounted electric motor
Power: 843hp at N/A rpm
Torque: 1470Nm N/A rpm
Transmission: 9-speed auto
Fuel consumption: 8.6L/100km
On sale: October to December
Price: From Dh875,000 (estimate)
What sanctions would be reimposed?
Under ‘snapback’, measures imposed on Iran by the UN Security Council in six resolutions would be restored, including:
- An arms embargo
- A ban on uranium enrichment and reprocessing
- A ban on launches and other activities with ballistic missiles capable of delivering nuclear weapons, as well as ballistic missile technology transfer and technical assistance
- A targeted global asset freeze and travel ban on Iranian individuals and entities
- Authorisation for countries to inspect Iran Air Cargo and Islamic Republic of Iran Shipping Lines cargoes for banned goods
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
The Pope's itinerary
Sunday, February 3, 2019 - Rome to Abu Dhabi
1pm: departure by plane from Rome / Fiumicino to Abu Dhabi
10pm: arrival at Abu Dhabi Presidential Airport
Monday, February 4
12pm: welcome ceremony at the main entrance of the Presidential Palace
12.20pm: visit Abu Dhabi Crown Prince at Presidential Palace
5pm: private meeting with Muslim Council of Elders at Sheikh Zayed Grand Mosque
6.10pm: Inter-religious in the Founder's Memorial
Tuesday, February 5 - Abu Dhabi to Rome
9.15am: private visit to undisclosed cathedral
10.30am: public mass at Zayed Sports City – with a homily by Pope Francis
12.40pm: farewell at Abu Dhabi Presidential Airport
1pm: departure by plane to Rome
5pm: arrival at the Rome / Ciampino International Airport
Key findings of Jenkins report
- Founder of the Muslim Brotherhood, Hassan al Banna, "accepted the political utility of violence"
- Views of key Muslim Brotherhood ideologue, Sayyid Qutb, have “consistently been understood” as permitting “the use of extreme violence in the pursuit of the perfect Islamic society” and “never been institutionally disowned” by the movement.
- Muslim Brotherhood at all levels has repeatedly defended Hamas attacks against Israel, including the use of suicide bombers and the killing of civilians.
- Laying out the report in the House of Commons, David Cameron told MPs: "The main findings of the review support the conclusion that membership of, association with, or influence by the Muslim Brotherhood should be considered as a possible indicator of extremism."
FIGHT CARD
Bantamweight Hamza Bougamza (MAR) v Jalal Al Daaja (JOR)
Catchweight 67kg Mohamed El Mesbahi (MAR) v Fouad Mesdari (ALG)
Lighweight Abdullah Mohammed Ali (UAE) v Abdelhak Amhidra (MAR)
Catchweight 73kg Mostafa Ibrahim Radi (PAL) v Yazid Chouchane (ALG)
Middleweight Yousri Belgaroui (TUN) v Badreddine Diani (MAR)
Catchweight 78kg Rashed Dawood (UAE) v Adnan Bushashy (ALG)
Middleweight Sallaheddine Dekhissi (MAR) v Abdel Emam (EGY)
Catchweight 65kg Rachid Hazoume (MAR) v Yanis Ghemmouri (ALG)
Lighweight Mohammed Yahya (UAE) v Azouz Anwar (EGY)
Catchweight 79kg Omar Hussein (PAL) v Souhil Tahiri (ALG)
Middleweight Tarek Suleiman (SYR) v Laid Zerhouni (ALG)
The specs
Engine: 4.0-litre flat-six
Torque: 450Nm at 6,100rpm
Transmission: 7-speed PDK auto or 6-speed manual
Fuel economy, combined: 13.8L/100km
On sale: Available to order now
First-round leaderbaord
-5 C Conners (Can)
-3 B Koepka (US), K Bradley (US), V Hovland (Nor), A Wise (US), S Horsfield (Eng), C Davis (Aus);
-2 C Morikawa (US), M Laird (Sco), C Tringale (US)
Selected others: -1 P Casey (Eng), R Fowler (US), T Hatton (Eng)
Level B DeChambeau (US), J Rose (Eng)
1 L Westwood (Eng), J Spieth (US)
3 R McIlroy (NI)
4 D Johnson (US)
How to watch Ireland v Pakistan in UAE
When: The one-off Test starts on Friday, May 11
What time: Each day’s play is scheduled to start at 2pm UAE time.
TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.
The specs
Engine: Two permanent-magnet synchronous AC motors
Transmission: two-speed
Power: 671hp
Torque: 849Nm
Range: 456km
Price: from Dh437,900
On sale: now
More coverage from the Future Forum
Killing of Qassem Suleimani
Specs
Engine: Dual-motor all-wheel-drive electric
Range: Up to 610km
Power: 905hp
Torque: 985Nm
Price: From Dh439,000
Available: Now
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
FIXTURES
Thu Mar 15 – West Indies v Afghanistan, UAE v Scotland
Fri Mar 16 – Ireland v Zimbabwe
Sun Mar 18 – Ireland v Scotland
Mon Mar 19 – West Indies v Zimbabwe
Tue Mar 20 – UAE v Afghanistan
Wed Mar 21 – West Indies v Scotland
Thu Mar 22 – UAE v Zimbabwe
Fri Mar 23 – Ireland v Afghanistan
The top two teams qualify for the World Cup
Classification matches
The top-placed side out of Papua New Guinea, Hong Kong or Nepal will be granted one-day international status. UAE and Scotland have already won ODI status, having qualified for the Super Six.
Thu Mar 15 – Netherlands v Hong Kong, PNG v Nepal
Sat Mar 17 – 7th-8th place playoff, 9th-10th place playoff
Hotel Data Cloud profile
Date started: June 2016
Founders: Gregor Amon and Kevin Czok
Based: Dubai
Sector: Travel Tech
Size: 10 employees
Funding: $350,000 (Dh1.3 million)
Investors: five angel investors (undisclosed except for Amar Shubar)
Moonfall
Director: Rolan Emmerich
Stars: Patrick Wilson, Halle Berry
Rating: 3/5
