The property developers Aldar and Deyaar reported first-quarter losses on Thursday, showing the difficulties in the downturn for companies lacking significant business beyond off-plan sales.
Aldar Properties, the largest developer in Abu Dhabi, posted a loss of Dh314.2 million (US$85.54m) for the first quarter because of low sales of land and homes.
Deyaar Development, in Dubai, reported a Dh100m loss after taking "significant provisions" in the same period. "In this economy, you need diversified revenue that is recurring," said Saud Masud, an analyst at the Swiss bank UBS.
In Abu Dhabi, developers have for the past year been increasing their rental property holdings and focusing on winning government contracts to build public housing. Sales have remained slow because of the downturn.
Without an influx of new sales or cheaper financing, these companies may start to find it hard to continue with some of their larger-scale projects, Mr Masud said.
Aldar pointed to the "lack of sales" as the main reason it posted a loss for the quarter.
The company saw its revenue drop in the first quarter to Dh227m from Dh496.6m in the same period last year.
"There is no shying away from the challenges which we are all facing in the market," said Shafqat Malik, the chief financial officer of Aldar. "Obviously there is an absence of major land sales or property sales ? We saw no land sales and few property sales for the first quarter."
Mr Malik said Aldar had increased its rental portfolio of hotels and offices to the point where it generated Dh140m of revenue in the first quarter, compared with just Dh18.8m in the same quarter last year.
"This is the long-term backbone of any business like Aldar," he said.
"By 2012, 2013, you will see a significant portion of revenue coming from these recurring income projects."
Emaar, the largest developer in the Middle East, has benefitted from this strategy.
It reported this month that it had a first-quarter profit of Dh760m on increasing revenue from its mall and hotel portfolios.
Deyaar did not give details on its performance from the first quarter other than to reveal a net loss of Dh100m after "making significant provisions during the first quarter of 2010".
A source close to the company said the provisions came from an increasing default rate among buyers.
Deyaar is facing the additional challenge of diversifying its income after having nearly finished all its projects.
The developer is to deliver five buildings this year, but it has little in its pipeline beyond that.
Deyaar recently underwent a major executive shake-up that saw its chief executive, Markus Giebel, depart after the resignations of the company's chief financial officer and its vice president for strategic planning.
bhope@thenational.ae
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Tuesday's fixtures
Kyrgyzstan v Qatar, 5.45pm
Ms Yang's top tips for parents new to the UAE
- Join parent networks
- Look beyond school fees
- Keep an open mind
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
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MATCH INFO
Uefa Champioons League semi-final, first leg:
Liverpool 5
Salah (35', 45 1'), Mane (56'), Firmino (61', 68')
Roma 2
Dzeko (81'), Perotti (85' pen)
Second leg: May 2, Stadio Olimpico, Rome
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if you go
The flights
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2025 Fifa Club World Cup groups
Group A: Palmeiras, Porto, Al Ahly, Inter Miami.
Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.
Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.
Group D: Flamengo, ES Tunis, Chelsea, (Leon banned).
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The UN General Assembly President in quotes:
YEMEN: “The developments we have seen are promising. We really hope that the parties are going to respect the agreed ceasefire. I think that the sense of really having the political will to have a peace process is vital. There is a little bit of hope and the role that the UN has played is very important.”
PALESTINE: “There is no easy fix. We need to find the political will and comply with the resolutions that we have agreed upon.”
OMAN: “It is a very important country in our system. They have a very important role to play in terms of the balance and peace process of that particular part of the world, in that their position is neutral. That is why it is very important to have a dialogue with the Omani authorities.”
REFORM OF THE SECURITY COUNCIL: “This is complicated and it requires time. It is dependent on the effort that members want to put into the process. It is a process that has been going on for 25 years. That process is slow but the issue is huge. I really hope we will see some progress during my tenure.”
MATCH INFO
Jersey 147 (20 overs)
UAE 112 (19.2 overs)
Jersey win by 35 runs
MATCH INFO
Manchester United 1 (Fernandes pen 2') Tottenham Hotspur 6 (Ndombele 4', Son 7' & 37' Kane (30' & pen 79, Aurier 51')
Man of the match Son Heung-min (Tottenham)
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