Deyaar back in profit last year

Dubai: Deyaar, Dubai's second largest property developer by market value, swung to a small profit last year on the handover of projects in its Business Bay development.

Deyaar made a full-year net profit of Dh37.7 million against a net loss of Dh2.87 billion in 2010, the company said in a statement to the Dubai Financial Market (DFM) yesterday.

The developer's results in 2010 were hit by large writedowns after Dubai's real estate bubble burst.

Deyaar handed over five projects last year in Business Bay. The company said last month it was on track to deliver four major projects in 2012, including three towers in Business Bay.

"The main reason behind Deyaar's swing to profit is the fact they have brought new products to the market," Craig Plumb, the regional head of research for property consultancy Jones Lang LaSalle, said.

"However, it does seem like the company is putting a lot of its eggs in one basket. There is still a lot of issues to be resolved at Business Bay, including a lack of infrastructure, which makes it difficult to attract prospective tenants," he added.

Plumb said Deyaar's results are further evidence that Dubai's property market is improving after a tumultuous few years but he also warned that certain sectors are yet to see the worst. "Dubai's retail and hotel sectors are still improving but the office and residential sectors have not reached the bottom," he said.

Deyaar's stock price gained 4.42 per cent to an almost two-month high of 236 fils per share on the DFM yesterday, its highest close since December 14. The developer said last month that two projects — Fifty One @ Business Bay and Oakwood Residency — were due to come online in the first quarter of 2012.

"The company will continue with its focus on completing projects in the pipeline, growing existing sources of sustainable income and exploring new business opportunities," Saeed Al Qatami, Deyaar's CEO, said in a statement to Dubai's bourse.