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Abu Dhabi’s Sorouh to focus on deliveries in 2011
Will continue to focus on home market; Sees Abu Dhabi rents, prices falling 10 pct more
June 22, 2011 3:33 by p.deleon
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 told the Reuters Real Estate and Infrastructure Summit 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 13 billion UAE dirhams ($3.54 billion) with delivery of some 7,000 units by 2014.
Abu Dhabi’s property market, home to most of the United Arab Emirates’ 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”.
Rents in Abu Dhabi are expected to fall a further 13 percent more in 2011 and another 10 percent in 2012, a Reuters poll in April showed.
Sorouh reported a 42 percent drop in first-quarter profit had no land sales in the first quarter and made less money on property handovers.
It won 2.89 billion dirhams worth of contracts awarded by Abu Dhabi’s Urban Planning Council (UPC) in April. (For more on the Reuters Global Real Estate and Infrastructure Summit, see
By Jason Benham and Praveen Menon
(Additional reporting by Sara Anabtawi; Editing by Mike Nesbit)