Text size:

  • Small
  • Normal
  • Large
Where Dubai rents have risen and fallen, Q1 2014. Click here

Aldar catches the eye of Bank of America

Lender sees a share that has been 'excessively punished'

Although Aldar Properties is a "capital-intensive developer with serious operating headwinds", it still represents better value than Emaar Properties, its more established rival in Dubai, says Bank of America Merrill Lynch. The lender recommends a 12-month price objective of Dh4.90, 31 per cent more than Aldar's closing price of Dh3.74 on the ABu Dhabi Securities Exchange General Index yesterday.

"We think the share price has been excessively punished, having corrected 20 per cent since the beginning of the year," the US bank said in a research note yesterday, Aldar has underperformed Emaar by about 40 per cent since the Abu Dhabi Government stepped in to make the repayment on a Nakheel bond in December. The price target accounts for a 50 per cent haircut to Aldar's Dh9.1 billion receivables from the Abu Dhabi Government and applies a 7.5 per cent cost to its debt.

The developer this month posted a first-quarter net loss of Dh314.2m, its second consecutive quarterly net loss. Lack of property sales constrained revenue, and returns from investment properties were also lower, which made the losses larger than the forecasts from Deutsche Bank and Shuaa Capital. Aldar, the largest developer in the capital and the company responsible for projects such as the Yas Island projects, last year sold some of its assets to the Abu Dhabi Government. Some analysts questioned the firm's overall liquidity, but Bank of America Merrill Lynch is less concerned.

"Near term, we expect a benign solution to receivables and, over the medium term, we see significantly lower execution risk and a higher probability of the value of core projects being crystallized," the note said. The bank also sees evidence of improved sales at Aldar's Al Raha Beach project. Aldar shares are down about 42 per cent since their peak in October and about 4 per cent since the company announced its first-quarter loss.

The US lender yesterday also restarted coverage on Emaar, the largest developer in the GCC by market capitalisation, with a neutral rating and a 12-month price objective of Dh4.40. Emaar shares closed at Dh3.81 yesterday. skhan@thenational.ae

Back to the top

More articles


Editor's Picks

 Cityscape Abu Dhabi 2014 will run until April 24, 2014. Fatima Al Marzooqi / The National.

In pictures: Cityscape Abu Dhabi 2014 opens
at Adnec

Key developments and master plans are being unveiled at this year’s property exhibition in the capital.

 Marina Square apartments Reem Island: Q1 2% rise. Studio - Dh65-68,000. 1BR - Dh75-95,000. 2BR - Dh110-145,000. 3BR - Dh170-190,000. Q1 2013-Q1 2014 no change. Sammy Dallal / The National

In pictures: Where Abu Dhabi rents have risen and fallen, Q1 2014

Find out how rental prices in the prime locations in Abu Dhabi have altered during the first three months of the year and the current rates you will pay according to data provided by Asteco.

 Designed by London-based Thomas Heatherwick, founder of Heatherwick studio, the park will feature an outdoor cinema, an organic garden, picnic areas and cafes and restaurants. Photo courtesy Salama bint Hamdan Al Nahyan Foundation

Futuristic Abu Dhabi park to be built in the desert shade

Spread over 125,000 square metres, Al Fayah Park, on Airport Road, will be covered by a sand-coloured canopy, 20 metres high, with the appearance of cracked desert land from above.

 Room with a view from one of the 21 duplex penthouses located in the Gate Towers sky-bridge. The sports courts and swimming pools can be seen below. Courtesy Alda

In pictures: Aldar’s Gate Towers Penthouse Collection on Reem Island

Aldar launched its Gate Towers Penthouse Collection at Cityscape Abu Dhabi. The launch features 21 penthouses spanning the skybridge, with each having a private indoor pool and incredible views.

 The Wind, Energy, Technology and Environment Exhibition takes place from April 14 to April 16. Above, the Dewa showroom during last year’s Wetex. Jaime Puebla / The National

April corporate and economic calendar for the UAE and overseas

From Cityscape to Wetex to stock-market holidays to nations reporting first-quarter GDP figures, here is our helpful calendar of April's business events in the UAE and internationally.

 Get the latest information on credit cards, bank accounts and loan products in the UAE. Mark Lennihan / AP Photo

Rates report: Latest on UAE loans, accounts and credit cards

Souqamal.com brings you the latest interest rates on banking products in the UAE.

Events

To add your event to The National listings, click here

Get the most from The National