Abu Dhabi: Arabtec Holding, the Dubai-based construction company, announced its subsidiary, Arabtec Construction, was awarded a contract worth Dh1.1 billion to build a residential development in central Dubai.

The project comprises two 50-storey towers, and includes residential apartments with a total built up area of more than 227,800 square metres.

Construction will start imminently, with an expected duration of around two and a half years, Arabtec said in a statement on Thursday to the Dubai Financial Market (DFM) where the company is listed.

The announcement comes less than two weeks after speculations surfaced in the market about Arabtec being close to winning new project contracts. The rumours sent Arabtec’s share prices up 10.5 per cent to reach Dh1.26, with shares accounting for roughly 37 per cent of DFM’s total trade value.

Share prices continued to rally for another few days — reaching a high of Dh1.83 — as the company’s former chief executive officer, Hasan Ismaik, raised his stake in Arabtec.

On Thursday, despite relatively strong liquidity on DFM, Arabtec’s share prices only rose 0.58 per cent to end at Dh1.74.

Saleem Khokhar, head of fund management at the National Bank of Abu Dhabi’s asset management group, pointed that the news on the project win may have already been accounted for in the price rally last week, hence the near-flat movement on Thursday.

“Despite a particularly difficult backdrop, they are in a position where they are able to win large contracts and that does provide for a decent pipeline looking forward. But the overall environment for the construction sector still remains challenging … I don’t think this one-off announcement particularly tips the scale for Arabtec, but it does show the company’s ability to gain [contracts],” he said.

In early January, Arabtec announced that it was awarded a Dh2 billion contract from Aldar Properties for the construction of 1,017 villas at West Yas, Aldar’s residential development on Yas Island.

Khokhar added that even with both the new contracts, the outlook is challenging especially as many real estate developers are putting their projects on hold this year.

Arabtec reported Dh2.3 billion in net losses for 2015, marking a significant plunge from the Dh215 million in net profits recorded in 2014.

Arabtec’s shares closed up 0.58 per cent to Dh1.74 on Thursday on DFM.