If the US$66 billion in property deals for Iraq announced this week go ahead as planned, two Abu Dhabi stocks could also be big winners. Aldar Properties and Sorouh Real Estate each own 30 per cent of Al Maabar, a development company overseeing a $21bn project slated for Baghdad. That updated figure is more than double the $10bn announced two years ago.
"The project is now apparently ready to jump-start at full force," said Sami al Araji, the chairman of the Iraqi National Investment Commission. The development, located at the Al Rasheed Military Compound, will cover 1,250 hectares and comprise residential units, a commercial district, a technology centre, a hotel and hospitality district, healthcare and educational districts, and public facilities such as mosques and gas stations.
After this week's announcement, Aldar gained 3.2 per cent on Tuesday, while Sorouh added 2.8 per cent as brokers cited the deal as a potential catalyst for the shares. Analysts remain concerned that a project this size could be beyond the capabilities of Iraqi banks and will require foreign investors through private banks and sovereign wealth funds from the Gulf. "For foreign investors, the biggest challenge still remains the security situation. Much of the larger foreign investors are in wait-and-see mode," said Ahmed Ahmed, the chief executive of Al Fawz Brokerage in Baghdad.
Aldar's stock remains relatively cheap and some analysts see a limited downside because of speculation that government funding is available if the company needs it to shore up any gaps in funding. Another catalyst for the third quarter will be the handover of units at Al Bandar, which began this month. Al Bandar is an island development on Al Raha Beach set around a marina that features more than 500 units and includes apartments and duplexes, loft-style residences and larger family apartments, all with balconies and waterside views.
At Dh1.78, Sorouh is down almost 30 per cent in the past six months but it has been inching up since hitting Dh1.57 in the middle of last month. halsayegh@thenational.ae