PW-191211_Deyaar_First phase of Midtown now completed_supplied-1575985961996
Deyaar's accumulated losses stem from provisions made during 2010 and 2018. Image Credit: Supplied

Dubai: The Dubai developer has a plan to write-off its Dh1.7 billion in accumulated losses. This will be done through using the developer’s legal reserves and also going through a capital reduction exercise.

Deyaar, which had come up with an improved set of numbers for 2021, has won the Board of Directors’ backing for the move, and which will now be presented to the wider shareholder base at the next general assembly. It is widely expected that the motion will pass.

Once that’s done, it will be a newly invigorated Deyaar that will be operating. Last year, it scored with the offplan launch of a skyscraper at Business Bay, which netted Dh1 billion plus in sales commitments. Plus, there is continued progress on the Midtown development and with its gradually expanding hospitality interests.

Sets the date
The next general assembly meeting will be held on April 18. If the quorum is not reached during the first meeting, the second meeting will be held on April 25.

Historical factors

The accumulated losses were brought on by provisions made from the first Dubai property market downturn in 2010. Plus, in 2018, the company adopted the IFRS 9 accounting, which meant it had to assign provisions totalling Dh661 million.

And in 2020, it ended the year with incurred losses of Dh216.9 million, much of which was brought on by the pandemic burst.

“In previous years, the company worked on completing all existing projects and launch new projects that have seen high selling rates in addition to strengthening the portfolio of assets,” Deyaar said in a statement. “The company has three projects in hospitality, which will contribute to increasing the revenues in the coming years.”

The other plan is to come up with more projects and divert resources to generating recurring income from property and facilities management services.