Abu Dhabi's Sorouh to focus on handovers in 2011

Residential rents, prices in capital could slide another 10%, says COO of developer
Abu Dhabi's Sorouh to focus on handovers in 2011
Sorouh expects to complete real estate projects worth AED13bn by 2014
By Reuters
Wed 22 Jun 2011 04:47 PM

Abu Dhabi's Sorouh Real Estate will continue to focus on the delivery of existing projects in its home market in 2011 and has no plans to expand abroad just yet, its chief operating officer said.

The emirate's second-largest developer by market value has "sufficient funds" to develop future projects, Gurjit Singh said at a real estate event in Dubai on Wednesday.

"Our 2011 will be pre-occupied with deliveries," Singh said. "Any other market would bring in many different types of risks and, at this moment, we can do with less of those."

Most Abu Dhabi developers have been focusing on completion and delivery of existing projects after suffering big losses during the global financial crisis, which put an end to a six-year construction boom.

Sorouh expects to complete projects worth AED13bn ($3.54bn) with delivery of some 7,000 units by 2014.

Abu Dhabi's property market, home to most of the UAE’s oil, has suffered less than neighbouring Dubai, where property prices slumped as much as 60 percent in some areas from their peaks in 2008, and billions of dollars worth of projects were put on hold or cancelled.

Singh said residential rents and prices in the UAE capital could decline a further 10 percent over the coming 6-to-12 months as supply continues to hit the market, while funding for the sector remained tough.

"Real estate is not the darling of the financial institutions," he said but added that interest rates for borrowing had eased to a "more palatable level".

Sorouh reported a 42 percent drop in first-quarter profit, after the firm saw no land sales in the first quarter and made less money on property handovers.

It won AED.89bn worth of contracts awarded by Abu Dhabi's Urban Planning Council (UPC) in April.

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