Deyaar, the region’s fastest growing real estate company, today announced the signing of an AED 600 million Mudaraba facility – its largest Mudaraba transaction to date - with Dubai Islamic Bank for part funding its impressive growth plans.
The facility assumes significance as it also marks Deyaar’s first step towards obtaining non-project finance. The initiative is in sync with the Shariah compliant financing route followed by Deyaar for meeting all its funding requirements. The facility, recently approved by the boards of Deyaar and Dubai Islamic Bank, was signed this week.
Deyaar has the largest portfolio of real estate under management in the country and is also one of the largest developers in the UAE.
Commenting on the facility, Saad Abdul Razak, Group CEO, Dubai Islamic Bank, said, “The Bank’s decision to provide the Mudaraba facility was driven by Deyaar’s strong credentials and its effective management and execution of real estate projects in the region. The facility, which brings together the capital and expertise of DIB and Deyaar respectively, is indicative of the great potential of Islamic finance structure in meeting the growing demand for corporates.”
Elaborating on the initiative, Zack Shahin, Chief Executive Officer, Deyaar, said, “The Mudarabah facility takes Deyaar a step closer in its long standing cooperation with Dubai Islamic Bank. Besides being significant to Deyaar’s sustainable growth over the longer term, the deal reaffirms the company’s robust financial health.”
Deyaar reported a phenomenal growth of 192% in net profits at AED 412 million in 2006. Sales during the year stood at AED 3.2 billion as compared to AED 1.7 billion in the previous year. The company’s asset base rose to AED 3 billion from AED 1 billion. Its year-on-year Return on Capital rose to 41% in 2006 from 28% in 2005.
“Proceeds raised from the Mudaraba facility will be deployed in funding new developments and acquisitions of land. The facility will enable Deyaar to participate in initiatives that are in line with its aggressive expansion strategy. As its first step in non-project finance, the Mudaraba facility reiterates Deyaar’s commitment to delivering high returns to shareholders, as also its preference for Shariah compliant instruments,” Shahin added.
The company has identified Saudi Arabia, India, Turkey and Kazakhstan as potential markets for investments. Deyaar is the first GCC company to enter Kazakhstan. In India and Saudi Arabia, Deyaar’s plans are at an advanced stage.
Deyaar has scaled up its land bank substantially in the UAE and as well as outside of it. Recent acquisitions have raised Deyaar’s total land bank to over AED 3 billion, of which the UAE accounts for AED 2.3 billion, the balance being in overseas markets.
As the `one-stop real estate solutions’ company, Deyaar has scaled up its presence significantly in 2006 both in terms of services as well as property development.
