Aabar Investments was a bright spot among regional equities yesterday, as investors seemed persuaded by the company's strong defence of the capital's property market. Khadem al Qubaisi, the chairman of Aabar, said on Saturday that its property arm had Dh5 billion (US$1.36bn) worth of projects in the pipeline that would be completed by 2012. Mr al Qubaisi said that despite some weakness in values of late, he foresaw a "boom" that would lift Abu Dhabi's property market to new heights.
"The situation at present in Abu Dhabi exactly resembles the situation in New York City ? some 40 years ago, where the real estate sector was the most attractive sector," he said. "It may take a plunge for a while but it shall gain tremendous value over time, with population increase or demographic growth." The New York City property market outperformed most other US cities in recent decades but did not keep pace with the Standard & Poor's 500 stock index.
Aabar shares were up as much as 4.2 per cent yesterday but closed the day with a gain of 3.2 per cent at Dh2.24. Last Thursday, Mohammed al Husseiny, the company's chief executive, said scrapping the deal to take over 70 per cent of the country's largest contracting company, Arabtec, was "purely consensual". The two companies have decided to discuss "a strategic partnership", but an operating structure had not yet been concluded. "We have a portfolio of assets that would keep Arabtec busy," Mr al Husseiny told Zawya Dow Jones.
By scrapping the deal, Aabar was able to preserve capital while gaining a valuable partnership. "Whichever way you look at it, it is a better deal for the company," said Fadi al Said, a senior fund manager and head of equities in the Middle East at ING Investment Management in Dubai. Aabar Properties is developing 10 projects in the capital and has an 80-storey tower under construction in New York City. The company has also finalised discussions to develop a hotel and resort on Jordan's Dead Sea.