Aldar to sell debut Islamic bonds

Aldar Properties, the United Arab Emirates' second-largest property developer by market value, said on Thursday it had mandated banks for its debut dirham-denominated Islamic bond sale. A three-day investor roadshow will begin on May 27, and will take in Abu Dhabi, Dubai, Bahrain and London, it said in a statement on the Dubai bourse website. Two bankers arranging the sale, who declined to named, said it could range from benchmark size to $1.5 billion in value, depending on investor demand. Benchmark size varies from $500 million to $700 million.

Initial sale size and pricing details of the five-year bonds could be set on Wednesday, the bankers said. Aldar's Chief Financial Officer Shafqat Malik declined to outline sale value, but said it would be a benchmark issue. The company sold at least $2 billion in Islamic bonds in February last year.

"It's for financing our projects; we have a huge pipeline," Malik told Reuters. The property firm, with about $65 billion of projects in the pipeline, has been raising funds to spearhead the Abu Dhabi government's drive to develop residential and leisure districts in the world's fifth-largest oil exporter.

Aldar is the latest borrower to return to the Islamic bond, or sukuk, market with a dirham issue after bond sales slowed in the second half of last year, following defaults on US home loans and the ensuing global credit crunch. Expectations that Gulf Arab states may revalue their dollar-pegged currencies to dampen soaring inflation has seen investors pile into Gulf securities denominated in local currencies, breathing life back into the sukuk market.

National Bank of Abu Dhabi, Abu Dhabi Commercial Bank, Barclays Capital, Credit Suisse, Dubai Islamic Bank, First Gulf Bank, Lehman Brothers and Noor Islamic Bank have been mandated as joint lead arrangers and bookrunners for the sale. The bonds will be based on an ijara, or leasing structure. Islam bans interest, and bonds are based on physical assets such as property, which pays a rent to bondholders.

In April, the developer said it would sell $969 million of convertible bonds to state-controlled investment firm Mubadala Development Co and agreed a $599 million Islamic lending facility from a group of UAE banks. Standard and Poor's Rating Services assigned the developer an A- long-term and A2 short-term corporate rating with a stable outlook, on April 25. (Reuters)

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UNB Launches its First Islamic Fund

Union National Bank announced the launch of the Al Samaha Islamic Fund, a Shariah compliant fund investing mainly in the UAE and with the flexibility to seek opportunities in other GCC countries, MENA and other emerging equity markets. The fund aims at investing in a balanced portfolio compliant with the Shariah creating a growth in the capital both in the short and long term.

The Fund will focus on Islamic equities in addition to other Shariah investment instruments that are compliant with the Shariah methodology. The fund is an Open-Ended Fund with Weekly Liquidity.

The minimum subscription to the Fund is AED 10,000 and thereafter in multiples of AED 1,000. Investment in units is open to all individuals without restrictions. The subscription will start on 18/5/2008 till 11/6/2008. The subscription and redemption forms for the fund will be available at all UNB branches all over the UAE. The fund will have weekly liquidity and its Net Asset Value (NAV) will be calculated and posted on a weekly basis.

"The idea of the fund emerged from the high liquidity in the local market and the low interest rates. In addition to the promising quarter results of the listed companies which led to the substantial increase in the stock market deals. All reflect the return of trust to the local market," said Galal Khadr, Head of Private Banking '&' Wealth Management Division at UNB.

"At UNB we are always keen to offer our clients distinguished services that meet their various requirements and we expect the Fund to be met with enthusiasm from a wide range of investors and for it to be our flagship entering into the Islamic products arena." Khadr said: "We also see new opportunities every day and are confident that the market can yield higher returns in the near and long term," added Khadr The Fund is approved by the UAE Central Bank and will be managed by a highly qualified team that will serve clients and offer them the latest investment solutions to address their investment needs.

Galal Khadr further commented: "The region continues to attract new funds and the UAE in particular has enjoyed continuous improvement in the investment environment which creates ideal opportunities for investment. On the macro-economic level, the region is being driven by a continuous surge in oil prices with the real estate and banking sector leading the economy. With the expectations of an increase in the organizations' profits in 2008 the stock market is expected to grow positively in the future."
/WAM/

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Abu Dhabi to be more 'investor-friendly'

Abu Dhabi will over the next five years seek more liberal economic policies, boost its industrial infrastructure and provide more support to small and medium-sized businesses, Department of Planning and Economy (DPE) officials said on Tuesday.

A new five-year strategic plan includes measures to ease the processing of licensing, in order to shape the emirate into a leading business and trade hub, DPE chairman Nasser Ahmed Al-Suweidi told reporters.

“The entire legal regime will be revamped as to encourage the flow of investments to the emirate. This overhaul will cover aspects such as licensing, transparency, free competition and incentives,” he said.

“In other words, the entire business climate will be made investor-friendly.”

The plan, which takes the emirate to 2012, has three main objectives, Al-Suweidi said, beginning with the achievement of a “rapid and sustainable” GDP.

It will also seek to further diversify the economy by reducing dependency on oil and increasing the share of the non oil sector, and thirdly will aim to speed the integration of Abu Dhabi into the global economy, by showcasing it as an investment hub, he added.

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Al Qudra Holding acquires 12.43% of Abu Dhabi National Industrial Projects

Al Qudra Holding, one of the largest investment companies in the UAE, said it has recently entered into an agreement to acquire 12.43% of Abu Dhabi National Industrial Projects' (ADNIP) shares.

The acquisition aims to strengthen the strategic cooperation between the two parties in identifying, developing, establishing and managing various industrial projects in the UAE and in the Middle East region.

Mahmoud Ibrahim Al Mahmoud, CEO of Al Qudra Holding said this ?marks the first step towards a long-term joint cooperation between Al Qudra Holding and ADNIP which aims to pioneer the industrial development in the UAE and the region at large. This is made possible by leveraging on the vast experience and expertise of the two companies combined to benefit our investors and ultimately, the national economy.? Mohammed Bin Joan Al Badie, Chairman of ADNIP, added that the apparent decision of the shareholders in introducing strategic partners aims at strengthening ADNIP's competitive position in the market and enabling the company to expand and develop mega industrial projects in the UAE, which will be announced in the due time.

Abu Dhabi National Industrial Projects Co. (ADNIP), is a leading industrial investment group fostering economic growth, entrepreneurial foresight and managerial excellence. ADNIP is adept at identifying, developing and operating high value commercial opportunities in the region in collaboration with leading global companies. /WAM/

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No decision on foreign ownership cap, says Sorouh

Sorouh Real Estate, the UAE's third-biggest property developer by market value, said on Wednesday it made no decision about whether to allow foreigners to own a greater portion of its shares.

Sorouh's executive director of treasury and investments, Firoze Kapadia, said on Tuesday the company's board was likely to decide by the end of the month on whether to raise the cap on foreign ownership to 40 per cent from 20 per cent.

"No decision has been taken by Sorouh's board of directors in this regard," Sorouh chief financial officer Ala Khannak said in a statement on the Abu Dhabi bourse Web site on Wednesday.

Kapadia said Sorouh is looking to raise the foreign ownership limit to attract more foreign institutional investors.

Shares of Sorouh rose almost four-fold last year and were up 5.9 per cent to Tuesday's close. They ended up 2.17 percent on Wednesday. (Reuters)

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Taqa plans $1.1bn bond sale

State-controlled Abu Dhabi National Energy Company (Taqa), a utility and petroleum producer, said on Tuesday it plans to sell as much as 4.15 billion dirhams ($1.13 billion) of convertible bonds.

Shareholders of the UAE-based company, that last year agreed on $11 billion of acquisitions from Canada to India, will meet next week to discuss the proposal, Taqa said, without giving further details about the planned sale.

Taqa Chief Executive Peter Barker-Homek said in December the company may sell convertible bonds this year to finance buyouts.

Last month, it said it was delaying a decision to sell the securities.

The company plans to triple the value of its assets to $60 billion by the end of 2012, from about $21 billion at the end of last year.

Taqa in November won Canadian approval to buy PrimeWest Energy Trust for C$5 billion ($4.98 billion) and the Canadian unit of Pioneer Natural Resource Company for $540 million.

The government of Abu Dhabi, the world's fifth-largest oil exporter, owns 75% of Taqa. The rest is publicly traded. (Reuters)

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At least 120 IPOs planned through to 2010

At least 120 initial public offerings (IPOs) are planned in the GCC through to 2010 as more and more companies look to equity markets to raise funds for expansion, Abu Dhabi-based Gulf Capital said on Tuesday.

The investment bank said the total value of IPOs over the next 21 months would be $24 billion, far exceeding the 83 IPOs reported for the same period up to the end of 2007, the combined value of which was around $10 billion, it said.

Gulf Capital said eight IPOs with a total value of $4 billion were completed during the first quarter of this year, eclipsing the $900 million raised by the same number of IPOs during the first quarter of 2007.

It forecast the value of IPOs would surge 101% this year compared to 2007. There were 33 IPOs issued in the GCC last year and 23 issued in 2006, it said, without giving a value for either year.

Gulf Capital said part of the increase in IPOs was due to their growing popularity in sectors such as construction, transportation, telecommunications, media and education.

Previously IPOs had been limited to sectors such as finance, oil and gas, and real estate, it said.

Gulf Capital said Saudi Arabia was home to five out of the eight IPOs launched during the first quarter, with a combined value of $3.3 billion.

Meanwhile, the UAE accounted for two IPOs, with a total value of $176 million, and one IPO worth $511 million was launched in Qatar, it said.

Saudi Arabia's Alinma Bank on Monday launched the kingdom's largest ever IPO, looking to raise 10.5 billion riyals ($2.8 billion) from the sale of 1.05 billion shares representing a 70% stake of the firm.

The IPO raised about 2 billion riyals on the first subscription day. Source

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Sorouh Real Estate to open more to foreign capital

Sorouh Real Estate plans to allow foreign investors to own up to 40 percent in the property company, up from the current ceiling of 20 percent, an executive said on Tuesday.

Firoze Kapadia, executive director of treasury and investments, told Reuters the company's board would likely make the decision at a meeting at the end of this month with the aim of attracting more foreign institutional investors.
"We want to make an effort towards ensuring that the majority of the shareholding rests with institutions, pension funds, fund managers," Kapadia said on the sidelines of a road show for Abu Dhabi firms in Tokyo organised by HSBC.
"We want to reduce the volatility in our share dealing."

When asked the likelihood of the board making the decision to raise the limit on foreign ownership, Kapadia said: "Absolutely."
"Since we opened up to foreign institutions or foreigners we've seen a huge increase in our share price. The institutions understand what they are buying into," he said. (Reuters)

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Mubadala eyes U.S. real estate firm

Mubadala Development Co, an Abu Dhabi investment vehicle that manages over $10 billion of assets, said on Sunday it is in talks to buy a stake in a U.S. real estate firm with which it will develop regional projects.

Mubadala, whose global shareholdings including a 7.5 percent stake in the Carlyle Group [CYL.UL], could buy a stake in Chicago-based The John Buck Co, its chief financial officer Carlos Obeid said in the United Arab Emirates capital Abu Dhabi.

Earlier on Sunday, Mubadala said it had set up a real estate firm with John Buck to build projects in Abu Dhabi, which controls the world's fifth-largest oil reserves, and across the Middle East.

"We are in discussions with The John Buck Co to take a stake in the company," Obeid told a news conference, without giving further details.

Mubadala is the latest state investment agency and sovereign wealth fund (SWF) to buy stakes in Western firms, many ailing from the fallout of a subprime mortgage market crisis in the United States.

The Abu Dhabi Investment Authority, regarded as the world's largest SWF, last year agreed to buy $7.5 billion of stock in Citigroup Inc, which could write down about $12 billion in the first quarter, Goldman Sachs said last month.

Regional investors have also been interested in U.S. real estate.

Bahraini Islamic investment bank Arcapital said in February it was looking at investing in the U.S. residential real estate sector after prices were hit by the mortgage crisis.

Emaar Properties EMAR.DU, the largest Arab developer by market value, also entered the U.S. market in 2006 when it bought a stake in John Laing Homes.

"Real estate has always been a critical factor in Mubadala's strategy and our joint venture with John Buck will focus on commercial real estate development in Abu Dhabi first and the region later," Obeid said of the new company.

John Buck International, in which Mubadala will hold a 51 percent stake, will be based in Abu Dhabi and will focus on real estate, leasing and management services, Mubadala said in a statement.

The firm would begin by developing Suwa island in Abu Dhabi, London-based magazine Middle East Economic Digest reported earlier this month.

The island will include a stock exchange, commercial and residential buildings, a hotel and a hospital, MEED said.

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Abu Dhabi Investment House (ADIH) reports net profit of AED 220 million for the fiscal year 2007

Abu Dhabi Investment House (ADIH) Chairman of the Board, Jowa'an Awaidha Al Khaili announced yesterday that ADIH made a net profit of AED 220 million for the fiscal year 2007, 47% higher than last year - distributing a cash dividend of 30% (0.3 AED per share) to shareholders.

Making an official statement, Mr Al Khaili said ‘this is the most successful year for ADIH in its third fiscal year. As a fairly young company, ADIH has managed to establish itself as a leading boutique investment house regionally and globally. This is attributed to clear strategy and business model focused on identifying unique investment opportunities that yield high risk adjusted return to investors. This was also assisted by our relationship with the investors, exploiting market conditions with robust economies and flexible government strategies, where ADIH operates.'

The operating income for the year is 304 million due to ADIH's investment under strategic plans to build the company's capabilities, developing new business, opening of new offices in Bahrain and Geneva and on the development of the company's human resources.

Return on Capital (ROC) has increased significantly since ADIH's inception. In 2005, ROC was 20%, increasing to 75% in 2006, and further growing to 110% in 2007, while net assets per share increased by 58% in 2007 to AED 3.03 per share compared to AED 1.92 per share in 2006.

The balance sheet grew impressively to AED 853 million - an increase of AED 139 million or 20% when compared to December 2006. This reflected strong business growth driven by increase in client investments in ADIH overall funds and projects.

The resultant increase to shareholders' value has allowed a cash dividend of AED 0.3 per share; a total of AED 60 million.

On the Social Responsibility front, ADIH was involved in several charity events and community service-related activities that included events for the disabled, Zakat and events that catered to helping increase youth activities.

Rashad Y. Janahi, ADIH Member of the Board and Managing Director, said, "Our 2007 results further demonstrate ADIH's fast and steady growth, as we continued to diversify our portfolio and seized major exit opportunities where possible. Despite the bank's relatively young age, it has succeeded in positioning itself as a major player in the regional market. ADIH will continue to originate unique funds, including Entertainment Cities in India, China and North Africa and other funds related to real estate, in addition to other business lines, particularly in asset management, private equity and corporate finance through experienced and professionals in the industry - all of which will contribute to another successful year.

"The financial performance could not have been achieved without the unwavering efforts and commitment of the entire ADIH team, who is dedicated to long-term success and returns to shareholders," he said.

2007 achievements

The Lagoon Fund - successful exit with an ROI of 30%

ADIH's activities and transactions in 2007 spurred the organization's strong performance. These transactions included ADIH's first fund exit, the Lagoon Fund, which yielded a 30% return on investment, above the initial projections. The fund, launched in June 2006 to finance the US$ 90 million commercial development: The Lagoon, at Amwaj Islands, managed to raise USD 42 million in equity, invested over its16 month investment period. This over-achievement reflected the significant interest in the project.

Al Arabi Fund - successful partial exit with an IRR of 25%

In addition, ADIH also made a partial exit from Al Arabi Equity Fund, which will give an internal rate of return (IRR) of 25%, above the initial 20% target IRR.

Entertainment City

In 2007, the Entertainment City concept was introduced. A mixed-use mega development, combining the clusters of residential, entertainment and retail that is set to be developed and implemented in the GCC, India, China and North Africa - with a cost of more than US$ 10 billion. To further ensure the concept is implemented according to international standards, the Entertainment City Advisory Board consisting of major leaders of the Entertainment industry was appointed in quarter 4 of 2007. Areas that the Advisory Board will be consulting on include: entertainment family centre and theme park operations, entertainment and sports events, performances and exhibitions, entertainment design and master planning, international entertainment and educational museums, entertainment and sports news and entertainment brands and sponsorship. Advisory Board members include the following members: Juha Tiihonen - Chairman and CEO, Starcut USA, Inc.; Joel Katz - Greenberg Traurig ; Charlie Besser - President and CEO, Intersports, ; Charles ; Mark Shapiro - President and CEO, Six Flags; Norm Chirite - Managing Director, RedZone Capital; Terry Stewart - President and CEO, Rock and Roll Hall of Fame; Bea Perez - Vice President, Coca Cola; Bruce Eskowitz - President and CEO - Premier Exhibitions; Charles Goldstuck - President and COO, Sony BMG and Randy Philips - President and CEO, AEG Live.

Qatar Entertainment City

Through a US$ 500 million fund introduced and launched by ADIH, the first of these ‘Entertainment Cities' is currently being implemented in Lusail - State of Qatar. Entertainment City Holding Company is responsible for providing the complete infrastructure of each component within Entertainment City. The holding company will also sub-divide the land plot into parcels and develop blueprint packages. The projected return on investment (ROI) is 60%. The development promises to be a regional hub for luxury living, leisure and entertainment. Subsequent to year-end, this will rolled out in India with the launch of the India Entertainment City fund in 2008, aimed to raise financing for the concept's implementation in the heart of India's entertainment industry.

Porta Reef

A US$ 34 million fund was created and launched to finance the US$ 90 million freehold residential towers in the prestigious Reef Island, Kingdom of Bahrain. This two-year investment has an expected annual internal rate of return (IRR) of at least 20%. The total size of the fund is US$ 37,000,000 comprising 3,700,000 shares denominated at US$ 10 per share. ADIH's investment contribution was US$ 1 million. The fund witnessed huge demand and oversubscription at the closing in 31 December 2007. During the first sales' phase of the project to end users, sales totalled over 60% of the entire project.

Sunset Hills

The US$ 33 million fund was launched to finance the US$90 million residential compound located in the Al Areen development - south of the Kingdom of Bahrain. Projected annual IRR is a minimum 20% over a 30-month investment period with an expected project cost of US$ 90 million. Approximately 50% of the project has already been sold to end users.

Lagoon Leasing

The fund is a $24m 3-year fund which offers investors a minimum annual IRR of 20% by investing in 60% direct equity interest in the Lagoon Real Estate Development Company (LRED) which in turn owns a substantial number of commercial units in the strategically located Lagoon project that comprises of 119 commercial real estate units on Amwaj Islands, in the Kingdom of Bahrain.

Al Joud GCC Equity Fund

Towards the end of 2007, ADIH launched the Al Joud GCC Equity Fund, which will invest primarily in listed securities issued in the GCC countries, in accordance with Sharia Investment Guidelines. ADIH will invest USD 5 million as seed capital in the fund. ADIH's prudent investment strategy is evidenced in this investment as the fund's launch comes at an opportune time, given the strong real GDP growth rates that are being witnessed across the GCC, and growing clients' appetite in investing wealth that was traditionally invested outside the region back into their home countries. With robust domestic demand and an increasingly diversified industry base, the GCC provides investors a welcome hedge against volatile global markets which are expected to witness an upcoming slowdown.

Physical Expansion

ADIH Bahrain

The office was created to cater to investors from one of the region's most important financial hubs and to emphasize ADIH's intention to establish regional presence. The ADIH Bahrain representative office is regulated and under the governance of the Central Bank of Bahrain.

ADIH Geneva

Announced in 2007, this office signifies the ADIH expansion into the European continent in a confident and strong manner - by employing specialized and professional management team. The office will mainly be conducting Wealth Management services to clients based in the Middle East wishing to invest in Europe and providing a gateway for western investors into the GCC market. Source

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Joint stock companies set to float on UAE stock exchanges

Five private joint stock firms with major holdings in Abu Dhabi’s real estate market plan to list initial public offerings (IPOs) and list their shares on the UAE’s bourses.

Al Qudra, Manazel, Al Rayan, Iskan and Ishraq are taking steps to transform themselves into listed companies to raise capital to finance major projects – estimated at more than Dh99 billion – both domestically and abroad.

The top officials at the five firms said the IPOs would result in a major boost for Abu Dhabi’s economy. They added that the rapid development of giant real estate ventures – funded by the listings – would meet the growing demand for accommodation in the UAE capital.

Going public will also allow more residents to profit from the building boom by distributing profits across larger segments of society, they said.

However economist Rida Muslim, chairman of Truth Economic Consultants, did not see the move as entirely positive for the emirate.

He acknowledged that the firms had matured to a point where they were prepared to offer shares publicly and that the capital raised would allow the companies to expand their project base.

The IPOs would also attract foreign investors who were currently pouring a lot of money into the UAE economy, said Rida.

He called on the regulatory authority, the Securities and Commodities Authority, to take its time in issuing approval for the share offers.
“This time is unsuitable for the transformation of companies into pubic joint stock companies. Going for IPOs is very risky. It will lead to the withdrawal of considerable liquidity from the market,” he said.

Al Qudra Holding

Al Qudra Holding plans to offer the UAE’s second largest IPO. It aims to raise around Dh3.7 billion to finance its expansion plans and raise its capital to Dh24.5bn.

The company will issue 55 per cent of its capital in new shares in phases. The first phase will start with around 25 per cent of the company’s shares, with each share valued at Dh1.

The company was established in 2005 as a private firm in Abu Dhabi with capital of Dh550 million and has made record profits.

It works currently in the market with Dh600m in capital. And its net operational profit is expected to rise from Dh703m in 2007 to Dh957m in 2008, Dh1.372bn in 2009 and Dh1.694bn in 2010. The last general assembly agreed to distribute 45 per cent of 2007 profit in cash to shareholders.

The company increased its subsidiaries from four to 30 and is active in the real estate, industry, transport and facilities sectors.

The company has announced it will carry out projects worth Dh150bn during the next few years, the most important of which are Dana Abu Dhabi, Desert Towers and Al Ain Al Faida.

The company won a Dh4.9bn contract for treatment of sewage water. This project is a first for Abu Dhabi Water and Electricity in the field of private sewerage projects.

Al Qudra Holding owns the Middle East’s biggest farm that produces organic vegetables. It was selected by the Higher Corporation for Specialised Economic Zones to set up a labour city in Al Ain accommodating around 22,000 workers, which will be completed within two years.

Manazel Real Estate

Manazel Real Estate, headquartered in Abu Dhabi, was established in 2005 with a capital of Dh2.5 billion. Its five-year plan includes projects worth Dh40bn inside and outside the UAE.

Its first project in the UAE is Al Reef Villas on an area of 10 sq km, near Abu Dhabi International Airport. All of the project’s villas and apartments were reserved within a few hours of launch.

The company has also rolled out other projects, such as Al Reef Downtown, Desert Rose, Prestige Tower and Dunes Village. The latest project, Dunes Village, is located on an area of 51,100 sq m and includes 19 residential towers. It is due to be completed within 24 months.

In the beginning of 2008 the company started the implementation of the Amman Garden project in Jordan on an area of 500,000 sq m and with an investment of Dh1.5bn. The project includes 1,700 residential units and targets medium-income people, including Jordanian nationals, Jordanian expatriates in the UAE, UAE nationals and foreign investors who wish to own residential units in Jordan.

During its participation in Cityscape, the company launched a residential and tourist project in Tunisia worth Dh5bn.

Ishraq

Ishraq, which was established by UAE national and Saudi investors as a private joint stock real estate developer with a capital of Dh1bn, is also looking to launch an IPO.

The company launched its first real estate project, Marina Rise, in April 2007 at Al Reem Island with an investment of Dh7.5bn. On the same date it signed an agreement with Abu Dhabi Islamic Bank for the bank to register and issue the certificates of Ishraq’s shareholders.

Ishraq declared that it would develop part of the Marina Rise project, while the remaining parts would be offered to investors.

Marina Rise overlooks the island’s marine front and is located on an area of 1.1 million sq m. It includes 21 luxury residential, commercial and hotel towers, including two four- and five-star hotels, a giant shopping mall and villas.

In a statement to Emirates Business, Sulaiman Al Dal’an, General Manager of Ishraq, said: “The company aims to strengthen its pioneering role in real estate boom seen in Abu Dhabi through the launch of other distinguished real estate developments soon to meet increasing demand for accommodation in Abu Dhabi.”

The company provided finance solutions for investors who wish to buy land or own residential and commercial units at Marina Rise in conjunction with Union National Bank and Al Wifaq Finance Company.

Some 70 per cent of finance is provided for investors for 20 years. Ishraq has divided the project into two basic parts. The first is for sale for investors. The second part is dedicated for a residential and commercial project on a total area of 220,000 sq m, where Ishraq will construct a hotel and office towers.

Iskan

The Abu Dhabi Executive Council approved the creation of the housing finance company Iskan as a private joint stock firm headquartered in Abu Dhabi with a capital of Dh2.5 billion and the company’s assets have risen by 30 per cent since its launch in 2006.

The company’s board agreed in March 2006 to start considering an IPO and called for top investors, government and private establishments in the UAE and GCC countries to buy shares in the company.

Iskan has unveiled property developments in Dubai and Fujairah.

CEO Khalid Al Sha’ali has confirmed that the company is currently attempting to transform itself into a public joint stock company.

Over the next three years it will launch projects worth Dh20bn.

Al Sha’ali confirmed that the company will announce soon the construction of two towers in Mohammed bin Zayed City in Abu Dhabi along with two other towers in Dubai.

Projects already under way – with an investment of Dh1.4bn – in Fujairah include the Golden Sand Beach and Al Fanar Towers. The latter is located in the heart of Fujairah city and will cost Dh1bn.

Al Rayan

Al Rayan was established as a private joint stock company with capital of Dh500m. The value of its investments has grown to reach more than Dh2.5bn. It has a number of investment projects scheduled to be implemented over the next three years with investments of Dh6bn.

Some 90 per cent of the company’s investments are currently in the real estate sector, seeking to benefit from the increasing demand for accommodation in Abu Dhabi and the sharp shortage of supply.

The company has other investments in shares, securities, alternative energy and logistics. The board decided recently to restructure the company to concentrate on three sectors – real estate, services and industry.
Currently Al Rayan is carrying out four property developments.

The first is a residential city for workers in Al Mussafah Industrial. It will accommodate around 25,000 workers and cost Dh850m.

The second project is a temporary residential project for workers. It will accommodate around 32,000 workers and cost Dh418m. The third project is a Dh200m building at Dana Abu Dhabi project. The building will have unfurnished apartments, furnished studios and a market.

The fourth project is located in the exhibition grounds in Abu Dhabi.

It will contain a hotel, offices and shops. The project’s cost ranges between Dh500m and Dh600m.

In the recent past, the joint stock company unveiled plans to construct a residential city in Abu Dhabi with a value of Dh1bn.

Fardan Hasan Al Fardan, chairman of Al Rayan, has announced that the company is hoping to launch an IPO before the end of the year. Source

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Abu Dhabi Group pays $42 mln for Georgian bank

The Abu Dhabi Group, an investment company owned by a member of the ruling family of the Gulf emirate, said it paid $42 million for Georgia's Standard Bank as it seeks to tap economic growth in the Caucasus state.

"We see good prospects for Standard Bank and our investment is long-term," Bashir Tahir, The Abu Dhabi Group's chief executive officer, told Reuters by telephone in the United Arab Emirates.

"There is also a lot of interest in Georgia from the United States and Europe, and some neighbouring countries such as Turkey," Tahir said.

Standard Bank said on Sunday The Abu Dhabi Group bought the lender from private equity group Salford Capital, which was close to Georgian billionaire Badri Patarkatsishvili, who died last month. It did not give a value for the purchase.

The Abu Dhabi Group is owned by Sheikh Nahayan bin Mubarak al-Nahayan, the UAE's minister of higher education. Abu Dhabi is the largest member of the UAE federation, the world's fifth-largest oil exporter, which is reaping a windfall from record oil prices.

The Abu Dhabi Group said in February it planned to invest hundreds of millions of dollars in Georgia's telecom, banking, tourism and real estate industries.
The firm said in August it bought a 50 percent stake in Bertelsmann's Middle East mobile phone affiliate as part of its strategy of boosting its telecommunications operations.
In November, it spent $16 million on a telecoms investment in Georgia, its first in the country. (Reuters)

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Abu Dhabi expects 7 IPOs this year

The Abu Dhabi Securities Market said on Monday it expects at least seven companies to sell shares in initial public offerings this year and list on the emirate's exchange.

"I've heard that there will be a minimum of seven substantial IPOs this year," Tom Healy, director general of the bourse, told Reuters in Abu Dhabi at the start of an investment conference.

The seven include Abu Dhabi-based Al Qudra Holding which said on Sunday it was delaying its March IPO to later in the year. (Reuters)

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ALDAR looks to Europe

Aldar is on the acquisition trail and the distressed real estate markets of Europe may be where Abu Dhabi's largest developer has set its sights. We speak to CEO Ron Barrott, and find out why greedy builders and banks are getting him down.

Ron Barrott says builders are getting greedy. It may be one reason why the CEO of Abu Dhabi's largest real estate developer is seeking to expand the Aldar empire overseas with possible acquisitions in play in Europe.

"There are a lot of contractors who are getting greedy at the moment and it's not just because costs are going up. What I'd say to them is that people have long memories,'' he says.

Barrott should know. His memory of the building game goes back 37 years. A building engineer by profession, the Englishman was running his own job as a project manager by the age of 20, and went on to found three development companies under the Stannifer name in the UK and the Czech Republic, before arriving in Abu Dhabi to steer the fledgling Aldar Properties.

Now as CEO of the real estate group, Barrott is planning the next chapter in Aldar's phenomenal growth story, that is likely to include an acquisition in Europe and could even involve an overseas stock exchange listing.

Aldar is the second largest developer in the UAE, behind Emaar Properties and like its larger rival, is now seeking to replicate the success of the residential-led master-planned mega project in developing markets overseas.

While Emaar has tended to form joint venture companies in the new markets it enters, Aldar is working with some of its domestic rivals in its foreign forays.

In Abu Dhabi, Aldar is building a theme park, hotels, cinemas and studios with Time Warner Inc. It is also the largest builder of residential units in the UAE capital, across its developments that include the Central Market and the US$18bn Al Raha Beach project, which is intended to house around 120,000 residents.

Abu Dhabi, home to more than 90% of the UAE's oil and gas reserves, is aiming to replicate the success of Dubai in becoming a tourism and entertainment hub for the region by adding hotels, theme parks and museums.

Aldar's overseas push is being spearheaded by ‘Al Maabar', a partnership formed a year ago that also includes Sorouh Real Estate, the second largest publicly traded developer in Abu Dhabi and Reem Investments.

Al Maabar plans to develop projects in Morocco, Libya, Belarus, Tunisia and Kazakhstan, where Aldar is building the US$2bn Norman Foster-designed Abu Dhabi Plaza project, which is similar in scope to the Central Market scheme in Abu Dhabi.

Inmobiliaria Colonial SA, the Spanish developer that was approached by Investment Corporation of Dubai in January, is a company that may fit the profile as a possible acquisition target for Aldar although Barrott says there are no active discussions taking place.

"It could fit the bill but we haven't looked at it. The Spanish market is interesting and the British market is interesting because of the way company values have moved. There is good value,'' he says.

Colonial's market value dropped 56% in six months to about US$4bn, as it incurred more costs servicing debt. Colonial would give its buyer about US$18bn of real estate in Madrid, Barcelona and Paris. Colonial also owns a 15% stake in Fomento de Construcciones & Contratas, the third largest builder in Spain.

We are looking at companies with a good profile and investment and a good development pipeline going forward, as well as fundamentally sound management,'' says Barrott.

Aldar was one of the biggest buyers of debt among UAE real estate developers in 2007, and raised about US$9.2bn from the market to fund its ambitious construction project in Abu Dhabi and overseas.

Despite ongoing turmoil in global credit markets, Barrott does not expect tightening credit conditions to impact adversely on its development pipeline, although he confirms that Aldar's 2008 debt requirement is likely to be less than last year, although its construction schedule is unlikely to slow.

"We will be looking to utilise the markets again. The good news is that since the market caught a bit of a cold last year, it hasn't affected the appetite of our bankers and investors - in fact it generated a proactive response from them,'' he says.

That confidence may be bolstered by the developer's extensive land bank and the fact that it still trades at a significant discount to its net asset value, a key measure for any real estate company. Aldar has a land bank that extends across 34 million sq m (366 million sq ft) and is valued at about US$10.33bn. It saw net profit surge 55% in 2007 to US$529m as it sold more homes in Abu Dhabi.

While Barrott plots Aldar's expansion abroad, at home he has had to deal with spiralling construction costs which have hit the price of diesel, cement and steel and given contractors in the capital an excuse to ramp up tender prices.

Rising labour costs have also been passed on as contractors are forced to pay their workers more.

But Barrott is not convinced that material and labour price inflation in the construction industry excuses contractors for the prices currently being quoted.

"The same thing happened in the UK some years ago when the market went through a rapid growth period and they were marking everything up," he says.

As a result Aldar has formed two joint ventures with construction companies in a bid to gain more control over its supply chain, cost base and build quality.

Aldar Laing O'Rourke, a joint venture with Britain's biggest privately-owned builder, was formed in November 2006 to carry out contracts on Aldar projects in Abu Dhabi, including the US$18bn Al Raha Beach project.

Now the developer has extended the model with a similar tie-up with the Besix construction group, to carry out work on its 2500-hectare Yas Island development that will be home to a Ferrari theme park, a world-class motor sports racetrack as well as golf courses, a polo club and about 300,000 sq m of retail space.

Although Aldar's share price has soared over the last year thanks to an influx of foreign institutional investment and a rising international profile, Barrott believes the company still trades at a "very heavy discount" to its net asset value.

Until now investors have been attracted by the company's large gifted land bank and its preferential position among property companies in Abu Dhabi. Now they will also be looking at its overseas project pipeline.

That will also be of interest to the increasing number of overseas analysts that have started to monitor Aldar in recent months in response to a growing appetite for its stock among outside investors.

Barrott does not rule out the possibility of a future overseas listing in a similar move to Emaar, which is mulling a secondary overseas listing as exclusively reported by Arabian Business in November.

He adds that the company has already listed a sukuk, or Islamic bond, on the London stock exchange.

"Obviously I'm well aware of the opportunities and of what a dual listing could mean.

"If it makes sense for shareholders and is in their best interests at the right time, then we will do it. I look after my shareholders best interests and to minimise their risks and maximise their returns. If that fits the bill at the right time, then maybe," he says.

In the meantime Aldar is focusing on adding to its Abu Dhabi operations in the expectation that house prices will eventually rise higher than Dubai where most foreign investor interest is still concentrated.

Barrott believes that could happen as quickly as five years as the emirates adds infrastructure, boosts tourism numbers and attracts the sort of key corporate occupiers who currently have their headquarters in Dubai but may move when enough quality office space becomes available.

While the capital does not yet rival Dubai as a tourism destination, the growth of the hotel sector and the expansion of its airport will bring more visitors to the emirate, he believes.

"If you look at any city in the world the most valuable real estate is located in the capital city. Abu Dhabi is no different," he says with some conviction.

"You can't get a hotel room in Abu Dhabi at the moment. Come 2009 and onwards you will see a significant difference in tourism numbers," he says.

The developer also plans to start a second mortgage unit offering conventional home loans to tap demand for new houses in Abu Dhabi and ensure competition for home loans for potential investors.

"We've set up an Islamic mortgage company and we are now looking at a conventional mortgage company," says Barrott.

"Mortgage customers are not getting a fair crack of the whip at the moment. There is no reason why our mortgages should be out of line with Europe.

"There is no reason why there should not be the same suite of mortgages on offer here.

Barrott formed his own contractor when he felt that builders were getting greedy. He did the same when he felt mortgage customers were not getting a fair deal. ‘If you can't beat them, join them' would seem to sum up his approach to doing business in the sometimes greedy world of real estate and construction.


From luxury to low cost

Aldar has entered the low-cost housing market in Abu Dhabi and is in discussions with Etihad Airways to provide more employee accommodation after being awarded its first project for the airline to provide homes for about 1000 staff members.

The airline is recruiting extra staff to accommodate surging visitor numbers that is increasing demand for employee accommodation in sectors such as hospitality, aviation and construction.

Abu Dhabi, which owns around 8% of the world's oil reserves, will more than double the number of hotels, adding a further 60 by 2015, the government said in its Abu Dhabi Policy Agenda 2007-2008.

"Tourism is a critical element in the overall development of Abu Dhabi," the government said in the Policy Agenda. "It will stimulate and diversify the economy, generate new private sector opportunities and elevate the emirate's international standing," it said.

Aldar's Abraj Towers housing development, opposite the airline's new headquarters building, is close to completion and will open in phases.

The first phase consists of nearly 200 one-bedroom apartments.

The new project has been developed as part of a joint venture between Etihad Airways and Aldar.

The community around Abraj Towers will eventually house more than 1000 staff in one, two, and three-bedroom furnished and unfurnished apartments.

Etihad currently employs 5700 staff worldwide, including more than 4850 based in the UAE.

Abu Dhabi is seriously aiming to draw 1.2 million tourists a year by 2015, 1.55 million business visitors, and 240,000 exhibition visitors. Source

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First Gulf wins approval to sell $2.5bn of bonds

Abu Dhabi's First Gulf Bank said it won investor approval to sell as much as $2.5 billion of bonds that are convertible to shares to finance expansion of its lending business.

The bank plans to sell the bonds this year, for which it has hired Goldman Sachs Group and Japan's Nomura Holdings, a bank director told a meeting of shareholders late on Monday. He did not give details or want to be identified.

"The economy is growing, there is new business and there is still market share to gain in the UAE," said the director. First Gulf confirmed the approval in a statement on Tuesday.
The bank said on February 3 it could return to the debt market by selling the convertible debt after delaying a bond sale last year.

First Gulf in July delayed a $3.5 billion eurobond programme "pending more stable and favourable international market conditions", it said at the time. (Reuters)

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Double the investment in as little as nine days

Speculators in off-plan Abu Dhabi property are doubling their investment in as little as nine days, industry sources said. This looks like a re-run of the gold rush in the early days of the Dubai property market. But finding these high-return opportunities is not easy as the market lacks transparency.

Flipping part-paid property bought off-the-plan from developers is a fast way to make a lot of money if you can find the opportunity with a trustworthy developer, and house prices are rising rapidly.

Investors put down a deposit of, for instance, 20 per cent on an apartment, preferably in a pre-launch purchase, and then re-sell for a higher price a short time later. But as investors have put down only that 20 per cent deposit, then a 20 per cent rise in the price of the unit means that you have doubled your money.

AME Info has talked to three lucky speculators in the past week who have achieved this in Abu Dhabi within the past month. One doubled his money in just nine days.


Market transparency
However, making money this easily is never quite as simple as it appears. All of the individuals we spoke to, who wished to remain anonymous, were working in positions that gave them knowledge about upcoming project launches that, while not privileged, is relatively hard to obtain.

On the other hand, this is surely true of any hot investment opportunity. Investors need to do their research and due diligence to sort out the wheat from the chaff, and the best opportunities are not likely to be advertised in the newspapers; you need to get out and find them.

It is a sure sign of just how quickly the Abu Dhabi property market has developed and how rapidly house prices are now rising that it is possible to successfully make large profits from flipping property.


Falling interest rates
In particular the recent slashing of US interest rates has put a new fire under the market. Real interest rates in the UAE are now strongly negative, a huge positive for any real estate market which has to discount the cost of money in valuing property.

This phenomenon may be relatively short lived. In Dubai the phase when good returns could be made from flipping property lasted not much more than a year, and in the end some speculators found that they could not re-sell and the market collapsed.

Given that speculators in Abu Dhabi can refer back to the very recent experience in neighbouring Dubai, it could be that this phenomenon is over more quickly, as the smart money will pile into the market fast and revalue real estate more rapidly.

Some people are very dismissive of speculators in markets but they do have a vital role in correcting price levels. But it has to be said that they do also often contribute to excessive prices through their over-enthusiasm. This is hard to counteract, although higher deposits on property is one corrective solution. (AME Info)

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Al Qudra plans Dh3.7b IPO

Al Qudra Holding will float a Dh3.7 billion initial public offering (IPO) in March as it plans to venture into real estate, tourism, agricultural projects in the UAE and Mena region.

"An allocation of 45 per cent shares has been made for the founders while the remaining 55 per cent a floatation of 25 per cent will be offered to the general public amounting to Dh3.7 billion," said Saleh Salim Al Shamsi, Chairman Al Qudra Holding, without elaborating on the details of the financial scheme.

The company's net worth under evaluation is estimated between Dh10.5 billion to 11.5 billion and would be made available at the time of the IPO. Al Qudra Holding, launched two years ago, made headlines when it launched 30 companies in diversified areas in less than a year. The companies run by the Holding Company specialises in real estate, infrastructure, utilities, solid waste management, media, tourism, transport, agriculture, sport management, engineering, manufacturing, investments and financial services.

The holding company plans a name change to Al Qudra Emirates Holding Company after the IPO launch and is set to expand in Kuwait, Saudi Arabia, Oman, Yemen and North African countries of Egypt, Morocco, Tunisia, and Algeria in the tourism, real estate, manufacturing and agriculture sectors.

With the support of the North African governments, Al Qudra is in the final stage to launch $850 million-worth of real estate projects which will include shopping malls, residential and commercial towers. In Algeria the company plans to launch $350 million-worth tourism and real estate projects.

Saleh Salim Al Shamsi told shareholders about the logistic services of the company and the Q-Link Taxi that operates from hotels.

The fleet of cabs would be expanded to 1,121 for Abu Dhabi and Al Ain in a five-year plan.

In the UAE, the new projects include the Emirates Investment Park to be built on a 22 square kilometre piece of land in Abu Dhabi. The initial feasibility study has already been approved by the Abu Dhabi Urban Planning Council and work on the second phase of project implementation is under way.

He said that the feasibility studies on the entire Al Qudra's development projects on Reem Island have been completed.

Projects on the 1.8 million square feet of land will include five sky-rise towers, comprising 45 storeys each.

Shareholders were briefed about investment opportunities available in the private sector to continue expanding Al Qudra projects and initiatives for which a strategy has already been finalised.

The assembly was informed that the decision to go public was to expand and support existing projects.

The assembly was also informed that the company has joined a consortium for the waste management in the country at a cost of Dh1.6 billion. Source

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Upcoming roadshow in Abu Dhabi to present top investment projects in Italy

The Italian Embassy in UAE will hold a road show in Abu Dhabi to present high profile investments and business opportunities in Italy, in the field of tourism, real estate and logistics.

The "Business Opportunities in Italy" event which will be held under the patronage of the Embassy of Italy to the UAE, the CEO of the Italian National Agency for Investments Attraction, "iluppo Italia", Domenico Arcuri, will present selected top projects to invest in Italy.

The road show event starts on Thursday, 21st February, 2008, at the Abu Dhabi Chamber of Commerce & Industry and at the Dubai Chamber of Commerce & Industry.

Italian ambassador to UAE Paolo Dionisi said the event is part of the two countries' interest in further boosting trade and investments various sectors.

Acquisitions of top hotels and resorts in top locations in Italy as well as financial participation in Italian ports and logistics platforms are among the opportunities to be presented to the UAE prominent investors and businessmen.

The event aims at attracting in Italy through appropriate incentives and 5-star opportunities, more UAE investors, within the framework of the strategic economic partnership between Italy and the UAE.

He urged Italian businessmen and investors to explore investment opportunities in the UAE.

80 Italian companies are operating in the UAE, he added.

Trade between the UAE and Italy reached USD billions while joint investments grew by 28% to reach AED 17 billions in 2006.

Italian exports to UAE between January and April 2007 to reach AED 6.3 billions. (WAM)

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NBAD takaful IPO 43 times oversubscribed

Gulf Arab investors offered Dh3.6 billion ($980 million) towards the initial public offering of an Abu Dhabi-based Islamic insurer, almost 43 times more than the firm was seeking to raise, the IPO adviser said.

Mithaq Lil Takaful sold 82.5 million shares at Dh1 each, equivalent to 55 per cent of the company and valuing it at Dhs150 million, Majd Maaitah, senior manager for securities services at National Bank of Abu Dhabi, said.

The nine-day sale closed on Feb.4. The shares will list on the Abu Dhabi exchange at the end of March, Maaitah said on Thursday.

"The response was very good," he said. Non-Gulf Arab citizens will be able to own as much as 25 per cent of the shares once they list. (Reuters)

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UBS, Abu Dhabi set up infrastructure investment JV

UBS AG and Abu Dhabi Investment Co said on Monday they would set up a joint venture firm to develop funds to invest in infrastructure projects in the Middle East, North Africa and Turkey.

ADIC-UBS Infrastructure Investment would launch its first fund worth $500 million in the first half of this year, they said in a statement before a press briefing in the UAE capital.

The 50-50 joint venture would "develop, promote and manage" infrastructure investment funds, they said. (Reuters)

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