Ma­jid Al Fut­taim Prop­er­ties feels pinch

Arab News - - BUSINESS - RE­BECCA SPONG

LON­DON: Dubai-based Ma­jid Al Fut­taim Prop­er­ties has posted a profit of 2.19 bil­lion dirhams ($596.25 mil­lion) for 2017, down al­most 7 per­cent on the pre­vi­ous year, cit­ing lower ho­tel rev­enue and poor macroe­co­nomic con­di­tions in Egypt as hav­ing a neg­a­tive im­pact on the com­pany's re­sults.

Ho­tel busi­ness rev­enue also weak­ened, ac­cord­ing to a fil­ing on Nas­daq Dubai, due to a drop in av­er­age daily rates. The firm said the re­cent Qatar travel boy­cott had also af­fected tourism in the UAE.

Ma­jid Al Fut­taim Prop­er­ties, the real es­tate arm of Ma­jid Al Fut­taim Hold­ing, also had to in­clude an im­pair­ment loss of 277 mil­lion dirhams on the planned City Cen­ter Al Maza mall in Egypt due to a de­te­ri­o­rat­ing Egyp­tian econ­omy cou­pled with high taxes and re­duced sub­si­dies that have pushed up in­fla­tion and a de­cline in con­sumer spend­ing. The mall is un­der con­struc­tion and due to open in 2019.

Ma­jid Al Fut­taim had to mark down an im­pair­ment of 185 mil­lion dirhams on the new Mall of Oman — which is ex­pected to open in 2020 — due to oc­cu­pancy lev­els at the shop­ping cen­ter be­ing lower than ini­tially es­ti­mated.

The com­pany did, how­ever, ben­e­fit from the open­ing of the su­per­re­gional Mall of Egypt in the first quar­ter of 2017 which brought in an ad­di­tional 68 mil­lion dirhams of rev­enue.

The mall fea­tures Ski Egypt, Africa's first in­door ski slope, a 21 multi-screen VOX cin­e­mas and a fam­ily en­ter­tain­ment cen­ter.

Cou­pled with higher rents charged at the Mall of the Emi­rates in Dubai, rev­enues for 2017 across all busi­ness arms rose to 4.6 bil­lion dirhams com­pared with 4.49 bil­lion dirhams the pre­vi­ous year.

The prop­erty firm is cur­rently de­vel­op­ing ‘My City Cen­ter Mas­dar' a 338 mil­lion dirham project in Mas­dar City, Abu Dhabi, due to open at the be­gin­ning of 2019. It has also started con­struc­tion on a new Abu Dhabi mall, the City Cen­ter Al Jazira, due to be com­pleted in 2021.

A new Dubai based ho­tel, Aloft City Cen­ter Deira, is due to open in the sec­ond quar­ter of this year, while the com­pany is con­tin­u­ing to in­vest in Oman with the de­vel­op­ment of the City Cen­ter So­har mall, ex­pected to open later this year.

Ma­jid Al Fut­taim Prop­er­ties, the real es­tate arm of Ma­jid Al Fut­taim Hold­ing, the group be­hind Ski Dubai, has re­ported a de­cline in earn­ings. (Reuters)

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