MEED 100 Sector analysis: Real Estate

31 March 2010

Mixed fortunes for developers as slowdown in the real estate sector continues to weigh in on profits

Of all sectors affected by the global slowdown, it has been a torrid 12 months for real estate. And for every firm that has seen an improvement on the MEED 100 list, there are those that have struggled.

Real estate
Rank 2010Rank 2009CompanyExchangeMarket Cap ($m)Share price ($)
557Ezdan Real Estate Company Doha23,1129.67
3747Emaar Properties Dubai (DFM)4,7760.78
4635Dar al-Arkan Real Estate Development Company Tadawul3,9463.65
4852Douja Promotion Group Addoha Casablanca3,82613.33
4941Jabal Omar Development Company Tadawul3,7335.56
=5136Compagnie Generale ImmobiliereCasablanca3,677197.24
5558Solidere (Lebanese Company for the Reconstruction & Development of Beirut) Beirut3,53622.01
7797Aldar Properties Abu Dhabi2,5060.97
8068Emaar, The Economic CityTadawul2,2552.65
8293Barwa Real Estate Company Doha2,2178.43
Source: Thomson Reuters

The mixed results are illustrative of a market that is still in a state of flux. While Dubai in particular continues to suffer, elsewhere in the GCC, tighter supply and demand, government commitment to spending and greater access to finance has ensured progress on some projects, which is reflected in this year’s ranking.

Real estate firms that have completed major projects in recent months have shown the strongest performance.

Dubai-based Emaar Properties benefited from the inauguration of its flagship scheme, the world’s tallest tower – Burj Khalifa. However, the unfolding Dubai debt crisis has now undermined some of this positivity.

Completed projects

Abu Dhabi’s Aldar Properties completed the Yas Island Formula One Grand Prix circuit in time to stage the emirate’s first race in November 2009. It has risen 20 places on the list to 77, more than doubling its market capitalisation to $2.5bn. But the company is performing less strongly than it was, it reported a loss for the fourth quarter of 2009 as a result of asset revaluations and the cost of hotel openings.

Since the start of the year, Aldar has received financial support from the government. It has also sold the Formula One track and the Yas Island Yacht Club and associated buildings, and infrastructure to Abu Dhabi government-controlled investment vehicle Mubadala Development Company for an undisclosed sum.

Lebanon-based Solidere has also completed major projects this year, in particular the souk development in downtown Beirut. In 2009, the firm tapped into one of the more promising real estate projects planned for Saudi Arabia. As a member of the City Centre Development Company, Solidere is involved in a regeneration of Jeddah’s historical centre and can be assured of continued growth.

Doha’s Ezdan Real Estate made the biggest jump on the MEED 100 list this year. The firm has moved 52 places to 5. The Qatar real estate developer, which also has a contracting subsidiary Ezdan Contracting, made an initial public offering on the Doha Securities Market in February 2008 with a paid-up capital of QR4.5bn ($1.3bn).

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