UPDATE 2: Real-estate firms slide on concern they may need government support after Aldar Properties sold assets and bonds to Abu Dhabi
UAE shares fell, sending Dubai’s
index to a four-month low, as real-estate companies slid on concern they may
need government support after Aldar Properties sold assets and bonds to Abu
Aldar, Abu Dhabi’s biggest
developer, slumped 7.1 percent as it agreed to sell assets for $5.2 billion.
Sorouh Real Estate Co. tumbled to the lowest on record. In Dubai, Emaar
Properties PJSC dropped the most since November. The DFM General Index fell 1.5
percent to 1,600.55, the lowest since Sept. 7, at the 2 p.m. close in Dubai. Abu
Dhabi’s ADX General Index lost 0.9 percent.
“The Aldar news is a challenge not
only for the company but for the country’s entire real-estate sector,” said
Mohammed Ali Yasin, chief investment officer at Abu Dhabi-based financial
services company CAPM Investments PJSC. “It shows companies may not have the
financing to build projects on their own and may not be able to grow without
Aldar reported its biggest quarterly
loss last year after the global credit crisis drove down Abu Dhabi property
prices by more than a third from their 2008 peak. The company will take a 10.5
billion-dirham ($2.9 billion) impairment charge to reflect the drop in
real-estate values. Aldar has 30.3 billion dirhams of outstanding debt,
according to data compiled by Bloomberg. That includes 16.8 billion dirhams due
Dubai’s Real Estate Index slid 2.3
percent and Abu Dhabi’s lost 6.5 percent.
Aldar plunged the most since May 25
to 2.11 dirhams. Abu Dhabi will pay 10.9 billion dirhams for a Ferrari theme
park, roads and bridges on Yas Island and 5.5 billion dirhams for homes and
land, Aldar said in a statement Jan. 13. Mubadala Development Co., a
state-owned investment company, will buy a 2.8 billion-dirham convertible bond
from Aldar. Mubadala is Aldar’s biggest shareholder.
Sorouh, Abu Dhabi’s second-biggest
developer by market value, retreated 6.8 percent to 1.52 dirhams, the lowest
since listing shares in December 2005. Emaar, the developer of the world’s
tallest skyscraper, dropped 2.6 percent to 3.38 dirhams, the lowest since Sept.
Saudi Arabia’s Tadawul All Share
Index gained 0.1 percent. Qatar’s gauge rose less than 0.1 percent and Oman’s
MSM30 Index was little changed. Bahrain’s measure rose 0.3 percent. Kuwait’s SE
Price Index decreased 0.2 percent.