Much talk over sale of Yas Marina Circuit

What's up Aldar Properties. Any deal for race track could improve Aldar's cash position.

If you believe the chatter among some analysts, Aldar Properties is weighing the option of selling its share in Yas Marina Circuit, the Formula One track it opened last year. Analysts estimate Aldar's stake in the race track could fetch as much as Dh2.5bn (US$681 million). The most likely buyer would be an arm of the Abu Dhabi Government, which is already a partner with Aldar in the project.

Aldar executives declined to comment yesterday. A sale, far from a sure thing, would make strategic sense for both parties. It would provide Aldar with a much-needed cash infusion and allow the company to focus on other aspects of the Yas Island development. The sale would also further the Abu Dhabi Government's commitment to Yas Island as a key component in its push to expand the region's tourism industry.

For Aldar investors, a deal would be "a positive thing", said Roy Cherry, a property analyst at Shuaa Capital. "Since it would probably be a government acquisition, it would be sold at the right price and would have a positive impact on the share price." Mr Cherry added there was no indication that the company was actively seeking buyers. In a separate assessment, Ahmed Badr, a Credit Suisse analyst, recently called a sale "likely" and predicted that if the deal happened it would be "a strong positive catalyst" for Aldar shares.

The Yas Marina Circuit is among the first attractions to open on the island, which will eventually be home to Ferrari World, a golf course and 20 hotels. Aldar stock has been sliding of late, falling more than a third in the past four months. It closed at Dh4.10 yesterday, down from its 12-month high of Dh6.63 in early October. Like many property firms, it has been battered by the financial crisis and a sharp decline in property values throughout the Emirates.

The company is also behind Al Raha residential towers and Motor World, a proposed one-stop shopping location for local car buyers. @Email:[e-mail]