Sorouh confident current turmoil will not affect its Dh50b portfolio

Abu Dhabi: Sorouh Real Estate's portfolio is currently valued at more than Dh50 billion, according to the CEO of the Abu Dhabi-based property developer.

"This includes Lulu Island in our portfolio," said Mounir D. Haidar.

Haidar said he expects the UAE markets to bounce back after the collapse on Sunday of banking behemoth Lehman Brothers.

The collapse was the primary reason for the total loss of Dh25.39 billion on Monday and Tuesday on the bourses in Dubai and Abu Dhabi.

"The health of financial markets in the world is tied to the UAE as well. It will have an impact. But, we are confident we will not be affected and hopefully, it will be over soon," said Haidar.

Asked if Sorouh would consider buying back its shares at its current valuation, Haidar said: "This has to be discussed at the board level."

He did not elaborate.

Sorouh's stock on the Abu Dhabi Securities Exchange was up marginally on Wednesday at Dh5.60 a share in afternoon trade.

Expansion on track

Haidar said Sorouh is going ahead with its expansion plans, including its proposed mixed-use projects in Egypt and Morocco.

He said the property market in Abu Dhabi is strong mainly due to the demand-supply mismatch.

"There's a strong demand for residential property in Abu Dhabi and the supply is still not up to the level of demand," said Haidar, adding that there is an estimated demand for 100,000 residential units over the next 8-10 years in Abu Dhabi.

"We will be providing 7,000-10,000 residential units over the next 3-5 years," said Haidar.

Haidar said Sorouh has raised $1.1 billion through asset-backed securitisation to fund its projects. The company's future fund borrowings would be need-based, he added.

Haidar noted that the cost of building materials has risen 40 per cent over the last 12 months.

"Our prices are based on the cost of construction materials," said Haidar, adding that Sorouh offers residential units priced as low as Dh700,000 and villas that carry a price tag of more than Dh3 million.

He said the company will launch Gate Towers phase-III residential development comprising three towers on Abu Dhabi's Reem Island at the next Cityscape realty show in Dubai.

The project's Phase 3 is estimated to cost Dh4 billion, said Haidar, adding that the entire Gate Towers project is valued at Dh11 billion.

The project will be delivered in 2012, Haidar said.

He said Sorouh also has plans for providing housing for middle-income groups. "We have a project - Golf Gardens II - which addresses this issue," said Haidar.