The operating arm of Dubai Holding yesterday reported a 25 per cent increase in net profit for 2015 to Dh5.83 billion, and set a target for profit to beat Dh10bn by 2020.
Dubai Holding Commercial Operations Group (DHCOG) said 2015 revenue was also 15 per cent higher at Dh14.5bn.
DHCOG operates some of the best-known businesses in Dubai on behalf of the state-owned investment company Dubai Holding. These include the developer Dubai Properties, the business parks operator Tecom Group (Tecom), the Jumeirah Group (Jumeirah) hospitality business and Emirates International Telecommunications, which operates the du brand.
It does not provide a breakdown of figures for each unit, but said that growth was supported by the strong performance of Tecom, Jumeirah and Dubai Properties.
Tecom, which operates 10 business communities, grew the number of companies operating from its parks by 11 per cent last year compared with 2014. It is now home to 5,100 firms with a total of 76,000 staff.
At the end of the year, it also launched In5 Media – a new Dh60 million incubator building for media start-ups that will be housed in the International Media Production Zone. This is a follow-up to the existing In5 incubator for IT and digital media companies housed in Dubai Knowledge Village.
DHCOG said Jumeirah was progressing with the expansion of Madinat Jumeirah and had signed four management deals to operate hotels in Dubai, Abu Dhabi and Malaysia. It also said the operator had achieved “robust” occupancy across its 23 hotels in Europe, the Middle East and Asia.
Dubai Properties, meanwhile, launched three new projects and handed over more than 800 new homes last year. It also said occupancy levels among a residential portfolio of 15,000 leased units stood at 98 per cent, commercial units were 100 per cent occupied and retail units 83 per cent.
“Dubai Holding continues to make big strides in its successful strategy aimed at creating an innovation-driven, knowledge-based economy,” said Dubai Holding’s chairman Mohammad Abdulla Al Gergawi.
Economists are divided on the prospects for Dubai and the UAE against a background of declining oil prices. Although oil only makes up 4 per cent of Dubai’s economy and the emirate set an expansionary budget for 2016 of Dh46.1bn – up 12 per cent on the previous year – it is still expected to be affected by global economic conditions.
Last month, the IMF cut its 2016 GDP growth forecast for the UAE to 2.6 per cent – down from 3.1 per cent in October, citing lower oil prices, government spending cuts and the global slowdown in trade.
Standard Chartered argued that the country’s GDP growth would fall to 2.9 per cent, from 3.8 per cent last year.
On the other hand, the trade insurer Coface said last week that it expects the UAE economy to grow by 3.3 per cent, arguing that it had “showed a degree of resilience” amid falling oil prices. It said non-oil trade would rise by 10 per cent year-on-year to Dh1.75 trillion, which would reinforce its position “among the top 20 trading economies in the world”.
BMI Research was even more bullish, arguing on Thursday that the Dubai Financial Market had been oversold after dropping by 28.1 per cent in value since last July.
“We forecast Dubai to be the outperformer in the UAE, with real GDP growth of 4.2 per cent in 2016 compared with 3.8 per cent for the UAE as a whole,” it said. “This additional growth will be driven by exposure to Iran’s growing economy and the tourism and construction sectors.”
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