By Ovais Subhani www.khaleejtimes.com
DUBAI – The Middle East’s largest listed developer Emaar Properties said on Thursday that it will realise revenues from the sale of properties at the world’s tallest tower, Burj Khalifa, formerly called Burj Dubai, in the financial year of 2010.
Emaar, 31.2 percent owned by the Government of Dubai, had posted revenue of Dh1.95 billion in the third quarter of 2009. The company last year had tweaked its accounting system and said that it will recognize revenues from its projects only after successful delivery.
“As Emaar recognises revenue and profits on delivery of the project, the revenue relating to the units sold in Burj Khalifa will be recognised in 2010 on delivery. This will positively impact the results of the company due to the large size of the project,” it said in a statement posted on the website of the main stock market operator Dubai Financial Market, or DFM.
The statement said that revenue boost in 2010 will also come from hospitality undertakings in Burj Khalifa such as the world’s first Armani Hotel, a joint venture of the developer’s unit Emaar Hotels & Resorts with Italian luxury company Georgio Armani, and retail operations such as Over the Top.
“This additional revenue will also positively affect the company’s performance,” the statement said.
Burj Khalifa, renamed after the President of the UAE and ruler of Abu Dhabi His Highness Shaikh Khalifa bin Zayed Al Nahyan, opened to much fanfare on January 4, to coincide with the day when His Highness Shaikh Mohammed bin Rashid Al Maktoum took office four years ago as Ruler of Dubai.
The $1.5-billion landmark glass-and-metal clad superscraper, which stands at the heart of a $20-billion downtown development close to Dubai’s main business district, is 90 per cent sold in a mix of residential units, offices and other space, the company’s Chairman Mohamed Ali Alabbar had told Khaleej Times in an exclusive interview earlier this week. Alabbar ahead of the official opening ceremony had said that the tower was expected to yield a surprisingly higher return of about 10 per cent for Emaar.
Emaar executives were bullish at the opening of the over 160-storey tower, which include 37 floors of office and retail space, saying that Dubai’s property prices have stabilised and than that new property completions would continue to increase over the next 18 months.
Designed by Chicago-based Skidmore, Owings and Merrill, the structure overtook Taipei 101 as the world’s tallest in February. Emaar aims to make the Downtown Burj Dubai area the city’s new centre, benefiting from the development’s proximity to the Dubai International Financial Centre, or DIFC, a tax-free business park that houses hundreds of international companies.
Emaar will start handing keys to its first residents of the 828-metre tower’s apartments and offices as early as February 2010. They will be the first of over 12,000 people who will live and work in the mixed-use tower comprising luxurious apartments, prime office space and exclusive hotels and restaurants. Emaar had sold most of the properties in the tower prior to its completion and much before the global financial crisis began. Many buyers in the residential part of the tower are wealthy individuals from the Middle East and the sub-continent who bought apartments as vacation homes or as an investment.