Qatar developer eyes funds for major deals

Ezdan Real Estate Co, Qatar's largest developer by market value, said on Thursday it planned to sell some of its real estate portfolio as it seeks to raise funds for billion-dollar projects in the next five years.

Ezdan's deputy chief executive officer, Samer Wahbeh, said the company, which complies with Islamic law, would build schools, hotels, residential units and hospitals in Qatar.

"We are still quite bullish about the market and have an aggressive expansion plan and we need to fuel this growth for the company," Wahbeh told Reuters in an interview.

Ezdan, which nearly doubled its net profit in the first quarter, is likely to earn 98 million riyals ($26.9 million) in the second quarter, Wahbeh added. The company reported full-year net profit of 1.4 bln riyals in 2008.

Qatar's property sector has suffered property price drops of about 30 percent in the last six months. But the economy could grow 7 percent or more in real terms in 2009 as it boosts gas production, its central bank has said.

To help finance new real estate projects, Wahbeh is in talks to sell about 4 percent of its portfolio, worth about 600 million riyals, to a real estate investment trust (REIT) based in Malaysia, Wahbeh said.

"We are looking at good opportunities to sell part of our property at the right price," he said, adding the company was looking at similar REIT vehicles in Singapore and the Dubai International Financial Centre.

Qatar is spending billions of dollars on infrastructure and property projects as it seeks to reduce its reliance on oil and gas income, which contribute 60 percent of gross domestic product and 66 percent of state revenues.

Wahbeh did not rule out pursuing real estate projects outside Qatar.
Ezdan expects to conclude a takeover of International Housing Group, first unveiled in March, before the fourth quarter, Wahbeh said.

"This will be done through share issuance to International Housing Group by Ezdan," Wahbeh said.

"It is going to be a major competitor to Ezdan and it makes sense to acquire it," he said, estimating Ezdan's assets are worth between 14 to 16 billion riyals, including projects under construction.

The companies share a chairman and both focus on developing property for the middle-income segment -- a fact that has enabled Ezdan to shrug off a property market decline since middle-income housing is facing a lack of supply, he said.

"If we are going to revise our prices, it is not going to exceed 10 percent, which is the maximum," Wahbeh said.

On the whole, Qatar home prices have fallen as much as 30 percent in the last six months due to the global slowdown, but lingering demand for property will limit price weakness, real estate Services Company Jones Lang LaSalle said in May.


Source: Trade Arabia News

Saudi property market 'offers good value'

The Saudi property market offers some of the strongest fundamentals in Gulf and international investors must take a close look at the sector, says a new report from HSBC.

Saudi Arabia is unique in the Gulf in that it has a large and under-provided domestic market, and the bank estimates that the country will need one million new homes by 2014.

Real estate companies in Saudi Arabia are set to benefit from macro-economic trends and socio-economic factors, it said.

In a comprehensive report on the sector, HSBC’s team concluded that Saudi Real Estate merits investment because:

• The shortfall of new homes required is unlikely to be met, meaning prices and rents will continue to rise

• The kingdom’s young population is set to expand

• The average number of people living in each dwelling is expected to continue to fall

• Homes remain relatively affordable in the kingdom, compared to other gulf countries

However, the report does not ignore risks: The slowing global economy will have an impact on Saudi Arabia, and the bank predicts property prices and rents to decline by 15 per cent in 2009 in certain areas.

But HSBC’s analysts see the country’s fundamentals as being stronger than the risks.

International institutions have been able to invest indirectly in Tadawul-quoted stocks since summer of 2008.

“These are interesting times for investors looking at Saudi Arabia,” said Raj Sinha, head of equity research, HSBC Saudi Arabia. “The kingdom looks set to emerge from the credit crisis in a better shape than many other emerging markets, and we remain positive towards the prospects for the Kingdom’s listed companies.”

HSBC was the first international bank to establish an investment banking operation in the Kingdom, and is now the largest and most widely represented international bank in Saudi.

Source: Trade Arabia News

UAE 'attractive for long term investments'

The UAE property market remains attractive for long term investors amidst economic crisis with Bahraini investors pumping over Dh95 million ($25.8 million) into the Emirates’ property market in the first quarter of 2009, said an expert.

The real estate developers in the UAE are now shifting their focus towards the completion of their projects and thereby strengthening the confidence of buyers across the globe, according to Bonyan International Investment Group, a leading real estate company in Dubai.

In addition to the completion of a wide selection of luxury and mid-priced developments, investor’s confidence is also rising as a result of the government’s efforts to provide unprecedented benefits to foreign buyers, said Faris Masoud, CEO of Bonyan International Investment Group.

The new multi-visit entry visa scheme, which enables property owners to enter the country and stay for up to six months, has been a timely step, he noted.

Furthermore, the UAE Government has also taken bold steps to inject liquidity into the market, including the $20 billion stimulus package, which is expected to help the construction sector to pick up in the coming months, he pointed out.

"Among the top UAE real estate investors are Bahraini nationals, who have pumped over Dh95 million into the UAE property market in the first quarter of 2009 as reflected by recently published reports by REIDIN.com.," Masoud added.

In line with this, the group has announced that it is currently looking to recruit new sales agencies across GCC to maximize the opportunity presented by this latest market development.

“We are witnessing positive indicators that the property industry is changing for the better, indicating that the real estate sector will begin to be active and profitable,” said Masoud.

“In anticipation of this, we are intensifying our efforts to further extend our capacity to meet our customers’ needs by extending our sales partner network, which will make our projects more accessible to potential customers across the GCC."

"We are also looking into expanding our project portfolio to provide investors with high quality projects that are ideal for long term investments," he added.

Bonyan has developed Dh3 billion worth of residential and commercial developments in Dubai, including ‘Rose Tower’, ‘Lulu Tower’, ‘ABBCO Tower’, ‘Dubai Gate 1’, ‘Dubai Gate 2’ and ‘Sharjah Gate Tower’ in Sharjah.

In addition, the developer has also built an impressive portfolio of projects in Qatar, including ‘The Lagoon Plaza’, a 34-floor twin apartment tower, and ‘The Palm Tower’.

"We have built a strong repute among Bahraini investors as the developer of high-quality projects, and our goal is to build further developments that can be classified as ideal long term investments by the global real estate community," Masoud noted.

"In line with our aims to penetrate the rest of the GCC states, our strategy consists of hitting the delivery target we have set for our projects to impress upon our valued customers our credibility and trustworthiness as a developer,” he added.


Source: Trade Arabia News