Tecom Group, the creator of specialised business districts and vibrant communities, has seen its H1 net profit surge 24% to AED603 million ($164 million), with revenues rising 9% year-on-year (YoY) to reach AED1.1 billion.

 

The revenue rise was caused by sustained growth in rental rates and occupancy rates across all business segments, including healthy retention figures. 

 

The performance follows solid results reported in the first quarter of the year and reaffirms Tecom Group’s role in enabling Dubai’s knowledge-based economy by attracting global and regional companies across six vital sectors to its 10 specialised business districts.

 

Robust fundamentals

Malek Al Malek, Chairman of the Board, Tecom Group, said: “The UAE’s and Dubai’s pro-business framework has strengthened the local knowledge and innovation-based economy, and Tecom Group is leveraging our city’s robust fundamentals to support the growth of global businesses in the Emirate. 

 

“The group’s first-half financial results demonstrated the success of our prudent capital management and future-focused business strategy. In recognition of this achievement, Tecom Group’s Board approved an interim dividend distribution of AED400 million to shareholders for the first half of this year. We are committed to strengthening our portfolio and continuing to deliver sustainable shareholder value." 

 

Abdulla Belhoul, Chief Executive Officer of Tecom Group, said: “As Dubai reaffirms its position on the global map as a destination of choice for foreign direct investment, Tecom Group is enriching the homegrown knowledge economy by consistently enhancing the ease of doing business and contributing to the city’s commercial real estate, which continues to outperform global peers.

 

High occupancy levels

“Our commitment to delivering high-quality offerings for investors and talent from around the world is reflected in the group’s first-half performance, with high occupancy levels across our Grade-A portfolio serving six priority sectors. Dubai remains a global magnet for the world’s leading innovators and investors, and we are harnessing the city’s appeal to continue generating long-term value for our shareholders.” 

 

Outstanding topline growth has contributed to a YoY surge of 9% in EBITDA, which reached AED896 million during the first half of this year. Reflecting Tecom Group’s successful business strategy, occupancy levels across its Commercial and Industrial assets grew to over 92% in H1 2024, representing YoY growth of 5%.  

 

Occupancy levels across the Land portfolio reached 96%, representing YoY growth of 11% in H1 2024, supported by visionary strategies and initiatives including Operation 300bn, Make it in the Emirates and Dubai Economic Agenda ‘D33’.

 

The group’s healthy retention rate of 91% complemented overall occupancy growth. More than 1,000 new customers, including multinational and regional leaders, joined the Group’s portfolio across Commercial, Industrial, and Land during this period. 

 

Tecom’s EBITDA margins remained healthy at 78%. Funds from operations (FFO) increased by 24% YoY to reach AED840 million supported by healthy collections and improved revenue quality across the Group’s income-generating assets. 

 

Q2 financial highlights

Tecom’s second quarter revenues grew by 9% to AED584 million YoY, supported by high occupancy rates. Higher occupancy demand across the Commercial, Industrial, and Land segments, supported by growing demand in Dubai’s commercial real estate market, has contributed to a YoY rise of 35% in net profit to AED311 million. 

 

New customers, improved rental rates, and healthy retention revenues contributed to a 7% YoY hike in EBITDA, which reached AED457 million in the second quarter of the year. 

 

H1 operational highlights

Tecom inaugurated the first permanent Middle East campus of L’ÉCOLE, School of Jewellery Arts at Dubai Design District (d3). It expanded Dubai Industrial City’s customer base with key new customers including Neelkanth Cables’ state-of-the-art manufacturing facility; Dubatt Battery Recycling’s integrated battery recycling plant, the first-of-its-kind in the UAE; MD Pharma Factory’s manufacturing facility; and a parts distribution centre serving as a hub for industry innovation by Arabian Automobiles Company, the flagship company of the AW Rostamani Group.

 

Tecom partnered with VFS Global to enhance the ease of doing business across its sector-focused districts with access to more than 200 services offered through Tecom Group’s digital platform, ‘axs’. It hosted the Autumn/Winter 24/25 edition of Dubai Fashion Week, Dubai’s official fashion week co-founded by Dubai Design District (d3) and Arab Fashion Council.

Tecom welcomed the Spanish National Professional Football League La Liga’s anti-piracy lab to Dubai Media City following La Liga’s memorandum of understanding with the UAE Ministry of Economy. 

 

H1 ESG highlights

Tecom reaffirmed commitment to environmental sustainability by raising the total number of LEED-certified structures in the portfolio to 41 during H1 2024.

 

It generated 9.7% of electricity from solar plants across its portfolio and enhanced electric vehicle (EV) charging capacity with 13 new stations. Tecom reported growth at start-up incubator in5 as a testament to Dubai’s entrepreneurial credentials and robust investor confidence in the city’s pro-business environment, with more than 940 start-ups supported since in5’s inception, a 28% increase from the same period in 2023.

 

It secured an average overall satisfaction score of 87.4% in customer experience index surveys, including in-depth interviews with customers.--TradeArabia News Service