Dubai March 6 2023: Dubai-based Majid Al Futtaim Holding LLC plans to grow its residential real estate business as the property and retail conglomerate taps a boom in the city’s housing market.
“Our property business had a strong year. Not just on the malls side, but our portfolio of property has become diversified and balanced,” Chief Executive Officer Ahmed Galal Ismail said in an interview with Bloomberg TV. “For the first time, almost one third of revenue in our property business came from the residential and communities business. That may increase to almost 50% of revenue on our property side next year.”
Ismail, who recently took over as CEO after running the the group’s property unit since 2018, was speaking after the group reported higher full-year revenue following a regional boom in tourism bolstered footfall at its malls, hotels and entertainment venues. Demand for Dubai property is also growing as the government’s handling of the pandemic and its liberal visa policies attract more foreign buyers.
Still, net profit slipped 2% to 2.4 billion dirhams ($653 million) due to higher inflation and currency fluctuations in several of the group’s markets.
“A good part of that (decrease in profitability) is that we’ve had a big inflation in operating costs. We’ve had still supply chain disruptions in retail being our largest revenue contributors,” Ismail said. “We also operate in 16 markets and in many of the markets where we operate, the exchange rate hasn’t been on our side. Kenya, Pakistan, Egypt, that’s 10% of our business.”
Expo, FIFA
Revenue for the year jumped 12% to 36.3 billion dirhams ($9.88 billion) and earnings before interest, taxes, depreciation and amortization rose 4% to 4.1 billion dirhams, driven by easing of covid restrictions coupled with a rebound in travel and tourism.
Events — including Dubai’s Expo 2022, also increased demand during holidays in Saudi Arabia and the FIFA World Cup in Qatar — boosted revenue per available room at its hotels business by 50%, while average occupancy increased by 14%.
“Majid Al Futtaim continues to benefit from a sustained upturn in consumer confidence,” the firm said in a statement on Monday. “The group plans further expansion in high-growth potential markets such as Saudi Arabia and Egypt, as well as in its home market, the UAE,” amid the resurgence.
With $18 billion in assets, MAF is among the United Arab Emirates’ biggest employers. It abruptly ousted Alain Bejjani as CEO in January, without elaborating on the reasons behind the move.
