DUBAI: Dubai’s Emaar Properties has reported an 8.5 percent increase in profits for the first quarter of the year thanks to its growing shopping mall and hospitality businesses. 

The UAE’s largest real-estate developer also said that “significant progress” on projects under construction also helped bolster its bottom line, according to a filing on the Dubai stock exchange. 

Overall net profit reached 1.5 billion dirhams ($409 billion) in the first quarter, when taking into account the impact of the Emaar Development IPO that took place in November. Overall revenue stood at 5.59 billion dirhams, 37 percent higher than Q1 2017 revenue. 

While the UAE’s property market remains weak, Emaar continued to launch a number of new projects during the first quarter.

Emaar launched the sale of the first blocks of residences on a private island destination, Emaar Beachfront, in the first quarter, as well as housing developments in Dubai Creek Harbour, Dubai Hills Estate, Emaar South and Downtown Dubai.

The developer’s shopping malls, hospitality, leisure and entertainment businesses generated revenue of 1.83 billion dirhams during the first quarter, accounting for 33 percent of the total group revenue and marking a 15 percent increase on Q1 revenue last year.

Dubai Mall, Emaar’s flagship retail development, opened its expanded Fashion Avenue in March, with work starting on the new regional Dubai Hills Mall the same month. 

The developer’s hospitality group currently has 50 hotel projects in its portfolio, including 35 upcoming projects in both the UAE and international markets. The company opened Rove Dubai Marina in April, and signed management agreements to operate hotels in Sharjah and Ras Al Khaimah. 

Emaar Development, the UAE build-to-sell property development business, posted property sales of 3.91 billion dirhams during the first quarter. It has a backlog of 41 billion dirhams, according to a company statement. 

Demand for real estate in the UAE has been sluggish in recent years due to the impact of low oil prices on the economy, and new supply due to hit the market is expected to keep prices relatively flat.

Real estate transactions in Dubai dropped in the first quarter of the year, according to data released by Dubai Land Department (DLD) in April. There was a total of 58 billion dirhams-worth of transactions in Q1, marking a 25 percent decline in deals when compared to figures released the previous year.

Property consultancy Cavendish Maxwell reported last month that average residential property prices dropped 2 percent year-on-year in the first quarter. More than two-thirds of the estate agents surveyed by the firm said they expected to see property prices and rents to continue to decline in the next quarter. 

Such concerns have impacted Emaar Properties shares, the heaviest weighted stock on the Dubai stock exchange. The stock fell by 1.73 percent to 5.69 dirhams on 1 May, taking its losses for the year to date to over 18 percent.