No impact of fall in realty stocks

The recent declines in stocks of UAE-listed real estate companies do not necessarily indicate a "no confidence" for the thriving property sector, according to experts.

"Real estate stocks have fallen across both Dubai and Abu Dhabi bourses. I don't believe there was any negative impact of the Morgan Stanley report as Emaar, Aldar and Sorouh, which were given an overweight rating, have all registered declines," Ganesh Mani, Research Analyst with Waves Investments told Emirates Business. "There is a correction happening across the Gulf Co-operation Council markets," he said.

Last week, Morgan Stanley said Mena property firms were trading at an average 62 per cent discount to their 2009 net asset value.

Emaar Properties, Aldar Properties and Sorouh Real Estate were down for the second consecutive day, closing 1.49 per cent, 0.65 per cent and 0.27 per cent, respectively. Union Properties, which was given an "underweight" rating, bucked the trend to close higher by 1.11 per cent.

Experts could not predict whether the money withdrawn from the stock market was being invested into the real estate sector.

Craig Plumb, Head of Research, Middle East and North Africa, Jones Lang LaSalle, said: "It was very difficult to say whether the stock market money is being pumped into real estate."

He, however, felt the UAE needs to allow more indirect investment in the real estate sector by way of real estate investment trusts or institutional funds.

"We believe that the country needs to provide more avenues for indirect investment in the real estate sector. It will certainly be a positive thing for the market," Plumb said.

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