* Q3 net 406 mln dirhams, revenue 1.86 billion
* Says sold total 201 units in Q3
* Revenue shortfall due to low property sales - analyst
(Rewrites first paragraph, adds details, analyst quote)
By Praveen Menon and Jason Benham
DUBAI, Oct 27 Dubai's Emaar Properties
, builder of the world's tallest tower, reported a 34
percent drop in third-quarter net profit on Thursday as it was
weighed down by the emirate's battered property market.
However, the developer's earnings marginally beat an average
analyst forecast for a 36 percent drop in profits, as recurring
income from its malls and hotels business grew.
The United Arab Emirates's largest developer by market value
made a net profit of 406 million dirhams ($110.5 million),
compared with 612.3 million in the same period last year, it
said in a statement on Dubai's bourse website.
In the first nine months as a whole, recurring revenue from
Emaar's hospitality and shopping malls accounted for nearly 41
percent of total revenue, with its malls business generating 1.6
billion dirhams in revenue, it said.
"This goes to show that Emaar's hotel and malls portfolio is
the main value driver," said Ahmed Badr, head of MENA real
estate and construction research at Credit Suisse.
Among Emaar's assets is Dubai Mall, the world's largest
shopping centre. It also has a joint venture with Italian
fashion house Georgio Armani to develop luxury hotels.
The developer's total revenue dropped to 1.86 billion
dirhams in the third quarter compared with 2.8 billion a year
Emaar, around 30 percent owned by the Dubai government, took
no impairments this quarter, unlike in the second quarter when
it wrote off its investment in Dubai Bank that was valued at 172
The developer is still to write off its exposure to troubled
Islamic mortgage provider Amlak .
HOME SALES SUFFER
Dubai's once-booming property market hit a wall in 2008 and
the decline worsened after the global financial crisis, ending
a massive building spree. Prices are down 60 percent from their
House prices in Dubai are expected to fall another 10
percent before stabilising, a Reuters poll showed this month.
Emaar said it handed over a total of 201 residential and
commercial units in the third quarter and 712 in the first nine
months of the year.
"The main reason behind the revenue shortfall versus our
expectations were lower revenues from property sales," said Roy
Cherry, lead real estate and construction analyst at SHUAA
Capital in Dubai.
Emaar's earnings from apartment sales fell by 85 percent, it
said in its last quarterly earnings.
The developer's Chairman Mohamed Alabbar said earlier this
week it is in the process of raising around $700 million from
The developer appointed a core management team in the
second quarter for a strategic review of its global operations,
In a bid to revive the battered real estate sector and
restore investor confidence, Dubai launched a real estate
investment fund this week worth up to $1 billion with Canada's
Brookfield Asset Management (BAMa.TO).
Shares of Emaar ended 4.8 percent higher, along with other
property-related stocks, after the fund was announced.
($1 = 3.673 UAE Dirhams)
(Editing by David Holmes)