Dubai's Emaar to shift focus after tower opening

Mon Jan 4, 2010 11:51am EST
 
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By John Irish

DUBAI (Reuters) - Dubai's Emaar Properties opened the world's tallest tower on Monday, marking the completion of the last of its big local landmark projects and the start of a new strategy which is expected to focus on overseas projects, hotels and hospitals.

"We will be focusing on our subsidiaries -- hospitals and hospitality -- which will create a lot of revenues for Emaar and also work on wherever we have started projects (overseas)," Issam Galadari, chief executive of Emaar Dubai said.

Emaar, 31.2 percent owned by the Dubai government, is the Arab world's largest listed developer, but is less indebted than other Dubai property firms, with about 8.1 billion dirhams ($2.21 billion) of loans and borrowings outstanding as of September 2009 of which about half is due this year.

Last year it posted a 53 percent rise in third-quarter net operating profit to 655 million dirhams, beating most analysts' forecasts, on higher sales of its high-end properties. Revenue in the third quarter was 1.95 billion dirhams ($531 million).

The performance contrasted with that of troubled compatriot Nakheel which has seen earnings collapse and its liabilities rise to $20 billion.

Following Monday's opening the $1.5 billion Burj Khalifa tower's first residents are due to move in next month and Emaar's chairman, Mohammed Alabbar, said 90 percent of the properties in the tower have been sold, the firm is set to get a 10 percent yield on its investment and the completion will boost earnings in 2010.

"It will have a positive impact on the first, second and third quarters of this year," Alabbar said while standing at the foot of the 828-meter high tower.

Roy Cherry, vice president of research for real estate and construction at Shuaa Capital said he expected Emaar's 2010 revenue to approach 10 billion dirhams, implying a growth of about 25 percent on the investment bank's 2009 forecast.   Continued...