Arabtec Holding Co. has won a 22.44 billion dirham ($6.1 billion) contract from Aabar Properties to build 37 towers in Dubai and Abu Dhabi, it said in a statement today. The shares climbed 6.1 percent.
The deal includes the construction of hotels and residential buildings, the company said in a statement to the Dubai stock exchange. Aabar plans to award Arabtec $20 billion of deals in countries including the U.S., Egypt, Morocco and Serbia, according to Arabtec’s statement, citing Aabar Chairman Khadem Al Qubaisi. Aabar Properties is a unit of Aabar Investments PJSC. Arabtec shares gained to 4.54 dirhams at 10:44 a.m. in Dubai.
Contractors and property companies are benefiting from a resurgence in the United Arab Emirates’ real estate market, where prices more than halved at the peak of financial crisis in 2008. Prices for mid-range apartments rose 43 percent in 2013, after climbing 18 percent in 2012, according to Cluttons LLC data on Bloomberg.
“The Arabtec news is a huge positive,” said Nayal Khan, head of institutional sales and trading at Naeem Holding in Dubai. “It’s a 22 billion dirham contract to build 37 buildings. That’s more than 50 percent of its backlog, which is completely unheard of.”
Dubai-based builder Arabtec last month won a 5.7 billion dirham contract to build an amusement park in Jordan, and plans to open an office in Baghdad. The company will open regional headquarters in Belgrade, Serbia to drive expansion into the Balkan region, according to an announcement last month. It also won a 2.59 billion dirham contract to build a mixed-use project in Abu Dhabi.
Bank of America Merrill Lynch last month recommended investors buy Arabtec’s stock, revising its price estimate to 3.6 dirhams from 1.98 dirhams. The shares have increased more than 60 percent so far this year, more than four times the gains on Dubai’s benchmark stock exchange.