Emaar Properties, the largest property developer in the country, saw its share price rise by more than 5 per cent in morning trading after an announcement yesterday that the company was chosen to build a more than 1.1km tower and development in Saudi Arabia. The multibillion dirham deal with Kingdom Holding comes at a time when property developers across the region are having difficulties because of buyers defaulting on their purchases and declining prices of homes. Analysts have said the summer will see a rash of consolidations and shifts in business strategy. Al Mal Capital raised its 12-month price target of Emaar by 7.2 per cent to Dh4.44 (US$1.20), saying that the deal "underscores Emaar's position as the preeminent Middle East developer". There were also more indications of positive sentiment about companies in the property and construction sectors.
Goldman Sachs, the investment bank, raised its target price for Arabtec Holding, the UAE's largest construction company, and two Abu Dhabi property developers, Sorouh Real Estate and Aldar Properties. Arabtec's price target was raised by six per cent to Dh3.77, on the back of signs of stability in the construction sector due to higher prices and changes to the firm's order book management. Arabtec's subsidiary in Saudi Arabia was last week awarded a contract worth Dh1.95bn to build the Lamar Towers project in Jeddah. "We remain positive on the outlook for construction activity in the region as recent firmness in oil prices should provide further support to the construction activity," the bank said. "We believe Arabtec is well positioned to benefit from this trend given its strong market position and track record." The price target for Aldar Properties, Abu Dhabi's largest property developer, was raised from Dh4.34 to Dh4.7, while Sorouh's went up from Dh2.98 to Dh3.91.