By: Mahmoud Gamal
Dubai – Mubasher: Financial analysts predicted that the real estate sectors in Abu Dhabi Securities Exchange (ADX) and Dubai Financial Market (DFM) would witness better financial results in the third quarter of 2017, due to the successful restructuring solutions, the open loan limit, and the commencement of the Expo 2020 projects.
The profits of listed companies rose 32% or AED 850 million to AED 3.5 billion in the first half of 2017, as compared to AED 2.65 billion in the same period of 2016.
The UAE’s real estate sector is still positive, despite the drop in unit prices on the regional level, Eyad Al-Bareeqy, general manager at Al-Ansari Financial Services (AFS), told Mubasher.
The increasing demand of foreign investment on purchasing in the projects of major companies will raise the revenues in the sector, especially with Emaar, Damac, and Union Properties, Al-Bareeqy added, noting that their latest projects will improve the financial results of 2017.
The real estate sector shows signs of recovery, and it will witness growth by the end of the year, Mena Corp asset manager Tarek Qaqish noted.
However, a drop in sales is expected, as new firms entered the market, especially Azizi Group, which might affect the financial results of contracting companies like Arabtec, Drake and Scull, Qaqish added.
The profits of the contracting sector are still low because of the fierce competition and low profitability margins, Qaqish continued.
The financial results of Arabtec Holding showed it turned to profits, with AED 41.86 million, after it incurred AED 3.512 billion in losses last year, after successfully finishing the capital restructuring program in June, collecting AED 1.5 billion to save its neck.
On another note, Drake and Scull went through a capital reduction process from AED 2.3 billion to AED 571 million, after objections on its plan by minor shareholders, and AED 1.03 billion losses in H1-17.
These two companies are still suffering from low returns on the future contracts, however; they passed the worst phase, but will not fully recover except after the end of 2017, Fadi El-Ghattis, CEO of Mindcraft Consulting, said.
On the other hand, the real estate development sector is expected to grow by 20%, on the back of Emaar and Aldar, especially with the momentum of real estate loans in conjunction with the implementation of EXPO 2020 projects, El-Ghattis added.
The banks financing to the real estate and construction sector rose by 6.2% to AED 16.5 billion, according to the Central Bank of the UAE.
Translated by: Mohammad Shokhba
