Shares of real-estate developers in Dubai surged today amid investors’ speculation that a $1 billion fund set up by the government and Brookfield Asset Management Inc. may help boost the emirate’s property market.
Emaar Properties PJSC, the builder of the world’s tallest skyscraper in Dubai, jumped 4.8 percent, the most since March 13, to 2.60 dirhams. Union Properties PJSC climbed 6.6 percent, the biggest gain since May 10, to 30.9 fils. Deyaar Development rose 3.5 percent to 23.8 fils. Each dirham has 100 fils.
The eight-to-10-year fund will be started with $100 million each from Toronto-based Brookfield and the Investment Corporation of Dubai, the companies said yesterday in a statement. It will target a “wide class of assets in both freehold and non-freehold areas.” Local, regional and international investors will also be invited to join the fund that will be capped at $1 billion.
Today’s performance was a “combination rally,” said Julian Bruce, equity sales head at EFG-Hermes Holding SAE in Dubai. “The European debt accord provided a platform of stability and overall positive sentiment, the ICD dedicated domestic real estate fund provided some additional impetus.”
European leaders boosted the continent’s rescue fund to $1.4 trillion in a bid to contain the sovereign debt crisis.
Some investors also anticipated “a decent number from Emaar,” Bruce said. Emaar said after the market closed that third-quarter profit fell 34 percent to 406 million dirhams ($111 million), beating the median estimate of three analysts in a Bloomberg survey for net income of 342.7 million dirhams.