RAK Properties, based in the United Arab Emirate of Ras Al Khaimah, posted a near 74% drop in fourth-quarter profit to 50.9 million dirhams ($13.86 million). It lost 60.81 million dirhams in the fair value of investments in 2008, compared with a profit of 29.38 million a year earlier.
It also booked a provision for impairment of 58.86 million dirhams for the year without giving details.
The UAE's once-booming real estate sector is going through a price correction that has seen the average cost of residential real estate fall by about a quarter in Dubai since late last year.
Emaar Properties of Dubai posted a loss in the fourth quarter, while Abu Dhabi developers Aldar Properties and Sorouh Real Estate saw profits tumble 85% and 90% respectively.
RAK's full-year profit fell to 379.46 million dirhams from 496.23 million dirhams in 2007. It earned 193.92 million dirhams in the fourth quarter of 2007 and 328.52 million dirhams in the first nine months of 2008.
However Mohammed Sultan Al Qadi, Managing Director & CEO of RAK Properties, remained upbeat. 'The previous year was a difficult one with all asset classes showing a decline, especially the real estate sector which has witnessed unprecedented challenges due to the financial crisis which was imported to UAE by external factors. Despite all these negative traits, the company was able to achieve a good result,' he said.
He expressed his confidence on the real estate showing a revival in the near future which will bode well for the emirate of Ras Al Khaimah where real estate is still in good demand due to the demand-supply inequality.
'We look forward to achieving sustainable growth this year and to continue to develop our projects in Ras Al Khaimah in line with the expectation of our stakeholders,' he added.
