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Al Mazaya Holding gets its groove back

Dubai: One of the more geographically extended developers in the region, Al Mazaya Holding is set to launch the second stage of its ‘Q-Point’ residential project in Dubailand. This way, the company intends to keep the launch-and-deliver pipeline in busy mode.

The first phase of Q-1 has crossed the 75 per cent completion mark and is also fairly well advanced on the sales cycle. “A considerable portion of current projects are expected to be delivered during 2014 and 2015,” said Ebrahim Al Saqabi, CEO. “This project represents an added value because it serves a considerable segment of consumers in Dubai who belong to the middle-class.”

Last year, the developer recorded profits of 6 million Kuwaiti dinars (Dh78.38 million), a 2,000 per cent gain on 2012. The turnaround was effected by improved sales and occupancy rates that translated into higher income. Revenues from rental properties totalled 4 million dinars. By year-end, total assets were valued at 228 million dinars against the 221 million dinars in 2012, while shareholders’ equity weighed in at 91 million dinars in 2013 (83.3 million dinars in 2012).

During the worst of the crisis, Al Mazaya saw a decline in the value of its assets by more than 135 million dinars. Provisions were taken and fresh liquidity pumped in to complete its roster of existing projects in Dubai.

“Since investors and customers were delayed in repaying due financial instalments, the company preferred to focus on the implementation of current projects and [clearing] all its financial obligations, which was reflected in the company’s ability to engage in new investments,” said Al Saqabi.

To nurse its numbers back into health, Al Mazaya also went through a programme of selling non-core assets. “This programme has already been started, throughout some of the existing investments in the GCC for the reason of developing new projects,” said Al Saqabi. “At this stage the amounts [realised from the sell-off] cannot be declared due to capital markets’ corporate governance.

“The company will gain large amounts as a result of exiting from a number of real estate assets, either by completing and delivering projects or selling new ones. We will leave investments which no longer run within our operational track.

“In general, it could be said that a lot of real estate companies have benefited from the financial crisis. They have become cautious in their pricing and launch of projects. Financial institutions have also become more cautious than before in dealing with the various companies; we are becoming optimistic about the current situation.

“We have sufficient liquidity by virtue of our income [realising] assets which generate up to 4 million dinars due to the integration of a new tower to our asset portfolio. Al Mazaya has also completed the restructuring of a considerable proportion of its loans and converted them from short- to medium- and long-term loans, which resulted in additional liquidity for the company as well as sales after we recently commenced delivering a large number of completed projects.”