Union Properties, Deyaar Rally on New Projects: Dubai Mover
Union Properties shares surged 8.8 percent to 0.956 dirhams, its highest close since November 2009 in Dubai. Deyaar climbed 5.3 percent to 0.71 dirhams. The Dubai Financial Market General Index (DFMGI) gained 2.6 percent today as trading resumed after a holiday.
The emirate’s two smallest publicly traded builders are starting new projects after a liquidity squeeze following Dubai’s property crash forced them to focus on restructuring debt. Union Properties on Oct. 8 said it sold two hotels and plans to expand a residential development. Deyaar’s chief executive officer on Oct. 9 said the company sold an office tower in the Business Bay district for 141 million dirhams ($38 million) and is working on plans to build two towers there.
“Those developers are starting new projects and benefiting from the increases in rents and prices” across Dubai, Tariq Qaqish, head of asset management at Dubai-based Al Mal Capital PSC, who manages about 500 million dirhams, said by phone. “The persistence of low interest rates is positive for real estate as an asset class.”
The central bank hasn’t changed interest rates since February 2009 when it reduced the repurchasing rate by 50 basis points to 1 percent.
Stock markets in the United Arab Emirates, which includes bourses in Dubai, reopened today after closing last week for Eid Al Adha holiday.
Deyaar, which is 76 percent below its 2007 high of 2.99 dirhams, has soared 102 percent this year. Union Properties, which is 82 percent below its June 2005 peak, has jumped 142 percent this year.
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