Shares in Arabtec Holding rose to a five-year high yesterday as the company said it will open a regional headquarters in Belgrade, Serbia, to drive its expansion in the Balkan region.
In an announcement posted on the Dubai bourse yesterday morning, the Burj Khalifa builder said that its new regional headquarters will serve as a launch pad for its planned expansion into the countries of the wider Balkan region.
Arabtec said it was already in “advanced discussions” with developers in the Balkans to take on new construction projects. The construction market in Europe has been hit hard by the global financial crisis, with thousands of job losses across the continent.
In yesterday’s trading in Abu Dhabi, Arabtec shares gained 7.0 per cent to close at Dh7.08, their highest finish since early October of 2008. This brings their gain for the year so far to 31.7 per cent. The stock’s all-time high was Dh6.21 a share on July 24, 2008.
Arabtec’s expansion into Europe is another part of Arabtec’s ambitious growth strategy to expand beyond its traditional activities of construction in Dubai and the UAE which was hit hard by the property crash.
In June, Arabtec raised Dh2.4 billion in the first phase of its rights issue, which it said would be mostly used for its expansion and diversification into affordable housing and oil and gas operations.
Since then the company has announced a string of new initiatives aimed at diversifying the company’s business even further including a joint venture with Korean giant Samsung and a new business aimed at developing its own real estate schemes as well as building them.
In recent weeks Arabtec has won a Dh2.59bn contract to build the final phase of Gate Towers on Reem Island in Abu Dhabi and a Dh5.7bn contract for a theme park in Jordan.
“We see great potential for Arabtec in the Balkan region. The opening of our regional headquarters in Belgrade provides us with a base from which to pursue available opportunities and achieve another milestone in our growth strategy,” said Hasan Abdullah Ismaik, the managing director and chief executive of Arabtec.
“Commercial ties between the Balkan region, in particular with Serbia, and the United Arab Emirates have been growing steadily in recent years. We are very pleased to extend national links into a new economic sector,” he added.
“This is a bold move by Arabtec both to move into a new geographical area and into a market which has been hit hard by recession over the past few years,” said Sebastien Henin, the portfolio manager at The National Investor.
“With Etihad Airways acquiring a 49 per cent stake in Air Serbia in August we suspect that this may be something to do with high level political talks between the UAE and Serbia,” he added.
lbarnard@thenational.ae
