Abu Dhabi shares sink to two-year low on property

Developers Aldar and Sorouh both sink to record lows amid concerns of oversupply
Abu Dhabi shares sink to two-year low on property
The ADX General Index dropped 0.6% to 2,456.77, the lowest since December 2009
By Bloomberg
Mon 17 Oct 2011 01:28 PM

Abu Dhabi’s
shares slumped to the lowest intraday level in almost two years as real estate
companies declined amid concern about an oversupply of property units in the
Gulf emirate.

Aldar Properties, the Abu Dhabi developer that’s had three chief executive officers in four
years, and Sorouh Real Estate Co, slumped to record lows.

The benchmark ADX
General Index dropped 0.6 percent to 2,456.77, the lowest since December 2009. The ADX Real Estate Index, down 2.9 percent today,
was the worst performer of nine groups in the benchmark so far this year after
losing 49 percent.

About 27m shares traded in Abu Dhabi, compared with
this year’s daily average of 67m shares.

“We’re not
seeing any real catalysts driving the market; there’s a lack of foreign and
local interest judging by the low volumes,” said Haissam Arabi, chief executive
officer at Gulfmena Investments in Dubai.

“The real-estate sector is still an
overhang; we are looking at a situation where there is oversupply now and more
to come.”

Abu Dhabi will
continue to have an oversupply of most types of properties, leading to a
further decline in rental and sale prices, Jones Lang LaSalle said in a
research report yesterday.

Vacancies in office and residential units will
also persist as supply increases, the US property broker said.

As many as 11,000
residential units and 150,000 square meters of office space may be delivered in
the fourth quarter, it said.

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