Kuwait – Mubasher: NBK Capital, the investment arm of Kuwait’s NBK, maintained its ‘Buy’ recommendation on Al Mazaya Holding. It also kept the stock’s fair value estimate at KWD 0.165 per share, with 59% upside potential from its last closing price.
“We maintain our positive view on Mazaya as we expect the company to continue benefitting from its ongoing mid-income real estate development in Dubai despite the general softness in the market, and its fully occupied rent-generating properties across prime locations in Dubai and Kuwait,” said NBK.
It added that, despite the strong profile of Mazaya’s assets, the stock currently trades at a price-to-book ratio of 0.6x (trailing; we note that Mazaya carries investment properties on a fair-value basis).
Mazaya owns around 270 residential units in Sky Gardens in the Dubai International Financial Center (DIFC) area (accounting for roughly 20% of our EV for the company). So far this year, rents in the DIFC area have outperformed the broader market, which we see as a positive for Mazaya’s rental income in Dubai. In addition, Mazaya has four commercial towers in Kuwait (more than one-third of our EV) that are fully occupied, unlike the general Kuwaiti commercial real estate market. Although we lack specific data, anecdotal evidence points towards significant vacancy rates in Kuwait’s commercial market.
