UAE real estate companies are expecting a mixed performance in the fourth quarter with earnings of Dubai-based developers likely to reflect the impact of the global liquidity crunch, a research report has said.
Credit Suisse's fourth quarter preview on UAE real estate says Dubai property developers are feeling the pinch of a global economic slump, with property prices dropping 23 per cent last December and thousands of expatriates losing their jobs, leaving an over-supply of housing units.
However, Abu Dhabi-based developers will fare better than their Dubai counterparts with visible under-supply sustaining property prices and demand.
According to the report, Abu Dhabi's top property company Aldar Properties' net profit for the period is expected at 1.2 billion dirhams, 62 per cent higher from the third quarter, with full year earnings expected at 4.6 billion dirhams.
"We expect fourth quarter earnings for both Aldar and Sorouh to increase by 62 per cent and 13 per cent, respectively compared to the third quarter. However, we expect earnings of Dubai's Union Properties to decrease by 50 per cent and Emaar 43 per cent," Credit Suisse said.
It said net profit for the fourth quarter of Emaar Properties, the region's biggest property company, is expected to drop from the previous quarter to 855 million dirhams on slower revenue growth. Emaar posted a net profit of 1.51 billion dirhams in the third quarter of 2008.
Emaar's full year profits should reach 5.7 billion dirhams, 13.3 per cent lower from 2007 earnings of 6.575 billion dirhams as the company took a 750-million dirhams goodwill writedown in the third quarter related to its US home-building unit, John Laing Home, it said.
Source: the hindu
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