- Tecom, the operator of various business zones in Dubai, reports a robust net profit of Dh293 million in the first quarter of 2024, showcasing a strong start to the year and solid financial performance.
Dubai zones operator Tecom books Dh293m in Q1-2024 net profit
Dubai: The Dubai zones operator Tecom Group booked a 15 per cent increase in Q1-2024 net profit to Dh293 million from Dh255 million a year ago. This came off revenues of Dh564 million, up by 10 per cent.
The latest tally builds on a ‘record’ set of results for the company, which operates the Dubai Internet and Media cities, the Design District, and Dubai Industrial City, among others. The Q1-24 figures were ‘driven by robust demand across the business from new and existing customers’, Tecom said in a statement.
“With occupancy rates across our portfolio consistently climbing for three consecutive quarters, we have now reached a company all-time high of 91 per cent,” said Abdulla Belhoul, CEO. And “with some business districts near full capacity.
“Demand from new customers across the six sectors we serve is palpable, notably for Grade A offices and industrial properties. We are also pleased with the very strong appetite from existing customers, with customer retention rates within our industrial leasing portfolio reaching a historic 98 per cent.”
Tecom stock’s been on a tear
On DFM, the stock is up 12 per cent over the last year and with a P/E multiple of 11.4. It will start trading today at Dh2.75.
Dubai’s wider commercial real estate space has been on a high, whether it’s offices or for warehousing. While the almost immediate booking of all available office space at the Uptown Tower was a high point, so is the news of Aldar and, just this week, the Canadian fund manager Brookfield investing in logistics assets.
As for Tecom, it expects the demand momentum to remain firmly in place. “We anticipate the demand-induced growth momentum to be sustained for the rest of the year,” said Belhoul. “Our confidence is underpinned by a positive macroeconomic outlook enabled by pro-growth government initiatives, including Dubai’s D33 and the UAE’s ‘Operation 300 billion’ (for industrial investments).
“We are confident in our ability to unlock greater shareholder value as we progress on our strategic growth agenda.”
Key signings for Q1-2024
- Alibaba Cloud opened its MEA training centre in Dubai Internet City.
- Dubatt launched the UAE’s first integrated battery recycling plant in Dubai Industrial City and signed a ‘musataha’ agreement to expand the facility, increasing its total investment to Dh216 million.
- Middlesex University Dubai introduced the ‘MDX Innovation Hub’ at Dubai Knowledge Park.
DEALS ON THE WAY?
“With Tecom’s office occupancy and industrial land lease occupancy both touching record levels (91% and 98%), it appears increasingly likely the company is poised for acquisitions and inorganic growth. Its FFO (funds from operations) is growing far higher than the S&P comparisons for commercial property…”
Sameer Lakhani of Global Capital Partners
