Aldar Properties PJSC (ALDAR) and Sorouh Real Estate Co. (SOROUH)’s talks about merging into a developer with $15 billion in assets may spark consolidation among other United Arab Emirates companies and push up real estate shares.
“We will likely see a lot of market activity across real estate names in both Abu Dhabi and Dubai and this news will help the stocks in the short term,” said Sebastien Henin, who helps oversee $100 million at The National Investor in Abu Dhabi. “We should expect more mergers as the companies lead the way.”
The two builders, part of Abu Dhabi’s drive to remake itself into a tourism and business hub, set up a team to study a possible merger with the “blessing” of the emirate’s government, which owns stakes in both, according to a joint statement yesterday. The team will present a plan in the next three months.
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