uae property companies shunned by investors
Last Updated : GMT 05:17:37
Emiratesvoice, emirates voice
Emiratesvoice, emirates voice
Last Updated : GMT 05:17:37
Emiratesvoice, emirates voice

UAE property companies shunned by investors

Emiratesvoice, emirates voice

Emiratesvoice, emirates voice UAE property companies shunned by investors

Dubai - Arabstoday

United Arab Emirates’ property developers and contractors may struggle to tap the bond market until a glut of homes that’s weighing on prices is sold off. Arabtec Holding, the country’s biggest construction company, Dubai-based mall-developer Majid Al Futtaim Group and Abu Dhabi’s Tourism Development & Investment Co were forced to delay plans to issue bonds. The nation’s sheikhdoms and non- real-estate companies raised about $9bn from debt sales as yields on Gulf bonds slid to a record 4.55 percent, the HSBC/NASDAQ Dubai GCC Conventional US Dollar Bond Index shows. The rate on Emaar Properties’s 7.5 percent bond due 2015 rose to 7.16 percent August 19, the highest since April.“A lot of lenders to UAE property companies got badly burnt in the past and they don’t have much appetite,” said Gus Chehayeb, a Dubai-based associate director at investment bank Exotix. “Real-estate assets on a lot of developers’ books also don’t seem attractive or liquid at this point.”Property markets in the UAE have been hurt more than other parts of the Middle East by the global credit crisis. Since September 2008, home values in Dubai slumped more than 60 percent and prices in neighbouring Abu Dhabi dropped by half as banks curbed mortgage lending and speculators fled. “The market is oversupplied and property transactions are still down significantly from their peak levels,” Chehayeb said. “Prices probably have more room to soften.” House prices in the UAE may drop by an additional 25 percent to 30 percent as population growth stagnates and more properties are built, analyst Saud Masud at Dubai investment bank Rasmala predicted in March. Dubai’s home prices are expected to decline further as 54,000 homes, or about 15 percent to 20 percent of the existing supply, comes onto the market from 2011 to 2015, Jones Lang LaSalle Inc. estimates. Forty percent of the city’s properties are already vacant. About 50,000 homes in Abu Dhabi, 27 percent of the current supply, will be completed by 2014, Jones Lang estimates. About 16,000 of those will be ready this year. Emaar, Dubai’s biggest real-estate developer, has been the only major company in the industry to proceed with a debt sale this year, raising $500m in Islamic bonds in January. The company constructed the world’s tallest tower, the Burj Khalifa, and the Dubai Mall, the world’s biggest shopping center.The rate on the developer’s 8.5 percent sukuk maturing August 2016 jumped 39 basis points to 7.42 percent this month. “Emaar has a diversified portfolio in Egypt, Turkey and India and a lot of its revenue comes from fully developed properties such as the Dubai Mall and Burj Khalifa,” said Nick Stadtmiller, a fixed-income analyst at Emirates NBD. “The picture is quite different when you start talking about contractors or developers, where a lot of the assets are still in the pipeline.”Arabtec, which doesn’t have a bond, in January announced a plan to raise $150m by selling convertible debt and shares. Two months later, the Dubai-based company delayed the transaction “until market conditions become more favourable.” It’s yet to announce a new date.Arabtec shares have tumbled 13 percent this year, compared with an 11 percent decline in Dubai’s benchmark stock index.“Lenders don’t view the credit profiles of these companies as particularly attractive and borrowers have to realize that the appetite is not there anymore,” Chehayeb said. “They have to set their expectations for pricing appropriately and they can’t expect to get the attractive pricing” that others in the region got. The biggest corporate bond sale in the Middle East this year was by International Petroleum Investment Co of Abu Dhabi, which raised $4.4bn. Emirates airline sold a $1bn bond in June. Arabtec reported an 80 percent slump in first-quarter profit, followed by a decline of 74 percent in the second quarter. The inability of developers and contractors to sell bonds can’t be blamed solely on the industry’s gloomy outlook, Emirates NBD’s Stadtmiller said in a phone interview. “Companies had a narrow window of opportunity to issue this year and by July, there was a sort of a general difficulty in the market,” he said. “That didn’t have to do with any particular sector but had to do with international conditions and with the problems in the Euro zone, there wasn’t as much uptake in Europe and North America for these bonds.” From / Arabian Business News

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

uae property companies shunned by investors uae property companies shunned by investors

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

uae property companies shunned by investors uae property companies shunned by investors

 



GMT 09:54 2018 Wednesday ,24 January

'Friendly and kind' N. Korean skaters

GMT 09:36 2017 Thursday ,07 December

Heidy Karam’s contract to present talk show close

GMT 10:50 2012 Friday ,20 January

Dusty weather expected in UAE on Friday

GMT 09:35 2018 Saturday ,13 January

New Zealand bat first in third ODI against Pakistan

GMT 10:48 2017 Saturday ,23 December

Meryl Streep's brand under threat

GMT 06:53 2017 Thursday ,11 May

17th Doha Forum To Begin Sunday

GMT 10:30 2017 Thursday ,23 November

Reports underline proliferation of weapons in Arab world

GMT 07:46 2017 Monday ,30 October

Catch it early, treat it early and move on

GMT 08:05 2015 Tuesday ,17 February

Conan O'Brien is first late night host to film in Cuba

GMT 16:17 2018 Thursday ,30 August

Five Saudi women pilots granted GACA licences
 
 Emirates Voice Facebook,emirates voice facebook  Emirates Voice Twitter,emirates voice twitter Emirates Voice Rss,emirates voice rss  Emirates Voice Youtube,emirates voice youtube  Emirates Voice Youtube,emirates voice youtube

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

emiratesvoieen emiratesvoiceen emiratesvoiceen emiratesvoiceen
emiratesvoice emiratesvoice emiratesvoice
emiratesvoice
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
emiratesvoice, Emiratesvoice, Emiratesvoice