Falling land values result in loss for Eshraq Properties

Abu Dhabi-listed Eshraq Properties slid into the red in 2016 as it took a hit on land values, the company reported.

In a filing to the Abu Dhabi stock exchange on Sunday Eshraq posted a net loss of Dh575 million for 2016 compared with a net profit of Dh1.6m a year earlier.

The company said that during the year it had taken an impairment of Dh593m on the value of land it held. It did not say where the land was located or why the value had fallen.

The developer said that the value of its total assets had fallen 8.8 per cent during the year to Dh2.07 billion from Dh2.27bn a year earlier.

But Eshraq said that company revenues for 2016 had grown 35.8 per cent to Dh28.8m from Dh21.2m a year earlier.

Last month Eshraq said it was pressing ahead with a series of projects in Abu Dhabi and Dubai after Abu Dhabi Financial Group became Eshraq’s second largest shareholder and ADFG chief executive Jassim Alseddiqi was appointed chairman of the developer.

Eshraq started initial work on the Dh225m Jumeirah Rise project in Jumeirah Village Circle in October.

Eshraq floated during the depths of the global financial downturn in 2011 owning three major properties: Jumeirah Rise in Dubai; Marina Rise, a cluster of residential and office towers on Reem Island; and a mixed-use project Gateway, between the Maqta and Sheikh Zayed bridges in Abu Dhabi.

It has not completed any of its three debut projects and has instead concentrated on selling plots of land on Reem Island and operating a hotel in Dubai.

Eshraq shares closed down 1.8 per cent at Dh1.1 on Sunday.

On Sunday property broker Chestertons reported that prices for villas in Abu Dhabi dropped by an average of 6 per cent during 2016, while apartment prices fell 3 per cent.

lbarnard@thenational.ae

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