Uncertainties about the completion of Avenues Mall in Kuwait City, planned to be one of the largest in the world, are hurting share prices at Mabanee, a real estate investment trust (REIT).
The stock fell 1.2 per cent yesterday because of frustrations that phase four of the project was still not materialising.
Mabanee, which is based in Kuwait and trades on the Kuwait Stock Exchange, fell to 820 fils a share yesterday. Mabanee is the first REIT in the MENA region and is focused on Avenues Mall, which it is expanding in phases.
The mall will eventually have 357,000 square metres of gross leasable area, slightly larger than Emaar's Dubai Mall.
Phases one and two of Avenues Mall are fully operational, including flagship stores such as H&M, IKEA and the French hypermarket Carrefour.
Phase three is under development and is expected to be completed by the first quarter of next year. Its construction is 16 per cent finished.
"Currently, phase one, phase two and phase three are all priced in," said Majed Azzam, a property analyst at Alembic HC Securities in Dubai.
"Furthermore, phase three still has not been delivered and won't be generating any cash flows until 2012."
Mr Azzam has a "neutral" rating on the stock and a target price of 900 fils.
Phase four, with a planned gross leasable area of 105,000 sq metres, is in the design stage and is awaiting regulatory approvals.
However, there are still no guarantees it will be built.
"It is still very premature for us to include it.
"We need to see sufficient funding, we need to see government approval and for it to materialise before we feel more comfortable to price it in," Mr Azzam said.