(MENAFN- The Peninsula)
The Peninsula
Doha: Barwa Real Estate Group yesterday announced net profit attributable to the shareholders of the parent company amounting to QR1.214bn for the fiscal year ending December 31, 2020. The leading real estate and investment company in Qatar and the region announced earnings per share of QR 0.31. The total assets of the Group amounted to QR33.1bn, and the total equity of the shareholders of the parent company reached QR20.3bn.
Based on the Group's financial performance, cash position and future development plans, the Board of Directors of Barwa Real Estate Company recommended to the General Assembly of shareholders to distribute cash dividends at a rate of 12.5 percent (at QR0.125 per share).
Despite the decrease in the net profit for the fiscal year 2020 compared to the year 2019, which is due to non-recurring items in nature such as real estate investment appraisal profits, the company has succeeded in enhancing its continuous operating income, as rental income increased by QR155m, equivalent to 13 percent of rental income for the year 2019. This is despite the impact of the COVID-19 pandemic, which reflects the strength of the Group's real estate portfolio and its ability to absorb fluctuations in the real estate market. In addition, the Group worked to rationalise its expenditures, which was reflected in a decrease of general and administrative expenses by 10 percent and a decrease in financing costs by 11 percent, in addition to a decrease in the ratio of rental expenses to rental income by 9 percent.
During the fiscal year 2020, the Group also succeeded in signing financing contracts worth QR3.4bn with the aim of refinancing existing credit facilities in a way that contributes to strengthening the Group's cash position during the coming period.
Despite the challenges facing the real estate market as a result of the Coronavirus pandemic, the company is moving forward towards developing its real estate portfolio in a balanced manner that helps face market fluctuations and supports continuous operational revenues, which is evidenced by the financial performance of the Group that has recently been able to support its real estate portfolio by several new operational projects. Its main projects are Mukaynis Compound, Barwa Al Baraha, Al Khor Recreation Extension Project and Dara (A) Project.
Mukaynis Compound project is one of the fruits of cooperation between Barwa Real Estate Company and the government of the State of Qatar, with the aim of supporting the efforts made by the government to raise the standard of living for workers, and to meet the needs of the local market from private residential cities for workers, in line with the objectives of Qatar National Vision 2030 and the preparations for hosting the 2022 World Cup.
The project is located on Salwa Road and includes 3,170 residential villas consisting of 25,360 rooms for workers, in addition to shops, a hypermarket, mosques, a security center, a government service center, and parking for buses and cars.
Barwa Real Estate started leasing activities for the first phase of the project during July 2019, through Al Waseef Asset Management Company, a subsidiary of the Group, and the leasing activities for the second and third phases began during the year 2020.
Barwa Al Baraha expansion project includes the workshops and warehouses located in the area adjacent to the workers' accommodation and it consists of 561 warehouses with an area of 300 square meters each, and 118 workshops with an area of 144 square meters each.
Al Khor Recreation Extension project consists of 516 apartments with a total area of 53,639 square meters, as well as a hypermarket and a multi-purpose hall. The construction work was completed at the end of the year 2019 and the leasing of the project started during the year 2020.
The area of Dara project 'the first phase, located in Lusail City, is about 16,421 square meters, while the total building area is 41,112 square meters. The project consists of 271 apartments of different sizes. The company started selling units during 2020.
In addition, the company continues to grow its real estate portfolio by developing many new projects. New projects include the implementation of the third phase of the Madinat Mawater project began in early August of 2019 on a land area of 418,000 square meters, and it consists of 118 showrooms, a center for spare parts and services for cars and a hypermarket. The project is an extension of the first and second phases.
An agreement to develop Qatar Schools project was signed during the year 2020, and it is the first project to be implemented under the public private partnership (PPP) system in Qatar, and its development is expected to be completed at the beginning of the year 2022.
Construction work began on Madinatna project, which is a residential City for families, during the last quarter of 2020, next to Barahat Al Janoub project, which is a residential city for workers, and both projects are located within the geographical scope of Al Wakrah Municipality. The value of the construction contract for the two projects amounted to nearly QR5bn. The Group is working on the economic feasibility study of many development projects proposed by the Public Works Authority according to the public-private partnership system. The Group's participation in any of these tenders will depend on its economic viability, in line with the Group's development strategy.
Barwa will also continue to study its available stock of lands to determine the optimal use of it, in a way that helps support the financial position of the Group and contributes to the development of sustainable returns.
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