By Matthew Brown
Oct. 26 (Bloomberg) -- Aldar Properties PJSC, Abu Dhabi's largest real-estate developer by market value, may say third- quarter profit increased as it sold more land and began to book profit from unit sales.
``The company's business model is coming together well, with strong contributions from land sales, rents and maybe even unit sales,'' said Sana Kapadia, real-estate analyst at EFG-Hermes Holding SAE in Dubai, in a telephone interview Oct. 23.
Net income may advance to 1.33 billion dirhams ($361.6 million) from 528.3 million dirhams in the year-earlier period, according to Kapadia. Robert McKinnon, managing director of Dubai-based investment bank Al Mal Capital PSC, predicts third- quarter profit of 555 million dirhams.
Abu Dhabi's real-estate developers have benefited from rising land values since foreigners were first allowed to buy property in selected areas in 2005. The emirate's real-estate prices overtook neighboring Dubai's in July this year with residential properties rising an annual 61 percent, according to HSBC Holdings Plc. Abu Dhabi will face a shortage of 28,000 housing units this year as demand outstrips supply, state news agency WAM reported Oct. 5.
Abu Dhabi, the largest of the seven sheikhdoms that make up the United Arab Emirates, holds nearly 8 percent of the world's proven oil reserves and controls the world's largest sovereign wealth fund, the Abu Dhabi Investment Authority, with assets of as much as $875 billion, according to the International Monetary Fund.
Net Triples
Aldar's shares have tumbled 54 percent so far this year, compared with a 51 percent slump for the ADX Real Estate Index, and a 23 percent decline for the ADX General Index. Aldar closed down 5.7 percent at 5.61 dirhams Oct. 23, giving the company a market value of 14.4 billion dirhams.
Kapadia maintains a ``buy'' recommendation on the shares and a price estimate of 44.9 dirhams. McKinnon rates the stock ``market outperform'' with a price estimate of 12.97 dirhams.
Sorouh Real Estate Co., the emirate's second-largest property developer by market value, said last week third-quarter net income more than tripled to 689.4 million dirhams.
Markets Last Week
Five of the seven Gulf stock markets tracked by Bloomberg declined last week. Saudi Arabia's Tadawul All Share Index slumped 10 percent. The Kuwait Stock Exchange Index tumbled 9.2 percent and in Qatar, the DSM 20 Index lost 3 percent.
Stocks dropped, following world markets, on investor fears a global economic slump will damp profits and as falling oil prices reduce the region's export earnings.
Crude oil on Oct. 22 closed at $66.75, the lowest settlement since June 13, 2007.
Benchmark indexes in the U.A.E. rose. Abu Dhabi's measure climbed 4.6 percent and Dubai's gained 1.7 percent.
To contact the reporter on this story: Matthew Brown in Dubai at mbrown42@bloomberg.net
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