DAMAC Properties has reported a 37 million UAE dirham ($10.01 million) loss for 2019 as the Dubai real estate market softened throughout the year, according to the company’s results.
Revenue for the year stood at 4.4 billion dirhams, down from 6.13 billion dirhams in 2018, a 1.73 billion dirham reduction. Profit in 2018 also stood at 1.15 billion dirhams, compared to 2019’s loss.
“Real estate is a cyclical industry across the globe; the Dubai real estate market, like others in the world, witnessed softer market conditions in 2019. This also impacted the financial performance of DAMAC,” Chairman of DAMAC Hussain Sajwani said in the release.
The firm has sought to focus on completing existing projects and paying down debt rather than investment in new launches, Sajwani said. The company reduced its gross debt by 1.6 billion dirhams in the 18 months ending December 2019.
“To safeguard the interest of our stakeholders, we have substantially reduced new launches over the last few years to avoid adding new capital commitments. We have been focused on selling completed and near completion inventory in 2019 and would continue to do so next year as well,” Sajwani said.
The coronavirus pandemic has begun to have serious negative effects on the Dubai real estate market, with some analysts expecting significant repercussions. S&P Global Ratings said Sunday that prices could hit levels last seen in 2010 when the market was still in the throes of the 2008 global financial crisis.
Last year, Dubai authorities announced the establishment of a committee to manage supply and demand in the real estate sector. The announcement came as the sector continues to experience an extended period of oversupply and falling prices.
DAMAC reports $10 million loss for 2019 as Dubai real estate prices fall