Dubai's largest, fully private real estate developer, on Sunday, posted its first annual loss ever-since it became a publicly traded company. This fallout from the coronavirus pandemic is a cause of concern for the emirate’s already weak property market.
Damac Properties, which hosts the Middle East’s only Trump-branded golf course, reported a loss of Dh.36.8mn ($10 million) in 2019 off 4.4billion dirhams revenue ($1.19bn). This is in comparison to Dh.1.15bn profit in 2018, off revenues of Dh.6.13bn ($1.16bn).
The company became publicly traded in 2013.
Damac, in its statement to the Dubai Financial Market Stock Exchange, the Damac Chairman Hussain Sajwani, while appreciating the Emirati leaders for their efforts in stabilizing the economy, also mentioned that the optimism may be belied by the economic repercussions of the new global pandemic which has stopped global travel.
The Dubai International Airport, the world's busiest airport for international travel has shut doors for its passengers, and many other private businesses too have been temporarily suspended.
Although the Damac’s 2019 results did not reveal the exact impact of the coronavirus outbreak, it mentioned it as a ‘subsequent event’ and said that it would take necessary measures to safeguard the interest of shareholders.On Saturday, S&P
he global ratings agency also announced that it lowered its rating for Damac from B+ to B due to the outbreak of COVID-19 illness. It also lowered its ratings for Dubai’s real estate giant, Emaar Properties, of which the emirate’s sovereign wealth fund owns one-third.The agency said the fall in residential prices in Dubai was expected, and the fall would be steeper than expected with ‘adverse trends’, stretching into 2021.
According to S&P, the outbreak of COVID-19 does add strain to the already weak real estate market in Dubai.