Dubai developers will do just as well 'renting' too: Deyaar CEO

Dubai: Leading developers in Dubai are learning that it’s not only about building new homes to sell – even renting them out directly is good for their numbers.

Deyaar’s Saeed Mohammed Al Qatami sure has such plans. “Our current rental portfolio is almost entirely made up of commercial real estate, at around Dh2.5 billion to Dh2.6 billion,” he added.

“Now, our plan is to create a residential rental portfolio and take our overall rental income to Dh3 billion.

"There’s good growth for developers from retaining properties for the rental market. It needn't always be about selling everything you build.”

The business model of Dubai Residential REIT – which completed a successful IPO and listing on DFM - will be a benchmark that other developers in Dubai and UAE can use. The REIT has more than 30,000 rental properties in over 20 popular locations in Dubai, including Palm Jumeirah. Together, they contribute a substantial rental income in a market that’s still seeing steady rental growth rates.

“Our focus had been in launching residential projects to sell, where we would retain some of the retail space,” said Al Qatami. “But in a market like Dubai’s, where there is more rental growth forecast, developers will do well in setting aside some residential units for steady rental income.

“We will do that by creating that portfolio mix.”    

Deyaar is coming off some fairly solid results of late, helped by an astute bit of financial restructuring that saw it get rid of legacy losses. It’s an operationally and financially sound company that has in the recent past taken on new projects in Abu Dhabi (the Rivage on Reem Island) and Umm Al Quwain (Aya Beachfront Residences).

These are the developer's first ventures outside of Dubai.

“We haven’t started recognizing sales from the Abu Dhabi or UAQ launches,” said Al Qatami. “That’s going to start later this year and early next. Deyaar has always been conservative in how we book the sales in our results.

“Our project in Umm Al Quwain will see us start construction at the earliest – the site does not require much by way of dredging or reclamation. That’s typically where the costs start to build up even before the construction. In our case, it doesn’t.”

On the financials, Deyaar closed Q1-25 with Dh119.82 million against Dh77.54 million, with new launches in Dubai helping. Of course, there was also the rents generated by its office and retail assets.

And soon, there will be another eye-catching launch in Dubai.