Dubai: Leading developers in Dubai are discovering that it is not only important to create new homes to sell; renting them out directly is also beneficial to their business.
Deyaar’s Saeed Mohammed Al Qatami sure has such plans. “Our current rental portfolio is almost entirely made up of commercial real estate, at around Dh2.5 billion to Dh2.6 billion,” he added.
“Now, our plan is to create a residential rental portfolio and take our overall rental income to Dh3 billion.
“There’s good growth for developers from retaining properties for the rental market. It needn’t always be about selling everything you build.”
Dubai Residential REIT
The business model of Dubai Residential REIT, which recently completed a successful IPO and DFM listing, will serve as a benchmark for other developers in Dubai and the UAE. The REIT owns more than 30,000 rental homes in over 20 major Dubai locales, including the Palm Jumeirah. Together, they generate a sizable rental revenue in a market with consistent rental growth rates.
“Our focus had been in launching residential projects to sell, where we would retain some of the retail space,” said Al Qatami. “But in a market like Dubai’s, where there is more rental growth forecast, developers will do well in setting aside some residential units for steady rental income.
“We will do that by creating that portfolio mix.”
Abu Dhabi, Umm Al Quwain launches
Deyaar has recently posted some strong results, aided by clever financial restructuring that enabled the company eliminate legacy losses. It is a financially and operationally strong company that has recently undertaken new projects in Abu Dhabi (the Rivage on Reem Island) and Umm Al Quwain (the Aya Beachfront Residences).
“We haven’t started recognizing sales from the Abu Dhabi or UAQ launches,” said Al Qatami. “That’s going to start later this year and early next. Deyaar has always been conservative in how we book the sales in our results.
“Our project in Umm Al Quwain will see us start construction at the earliest – the site does not require much by way of dredging or reclamation. That’s typically where the costs start to build up even before the construction. In our case, it doesn’t.”
Solid on Q1-25 numbers
In terms of finances, Deyaar finished Q1-25 with Dh119.82 million, up from Dh77.54 million, thanks to fresh launches in Dubai. Of course, there were rents generated from its office and retail properties.
There will soon be another eye-catching debut in Dubai.
