Abu Dhabi’s Sorouh inks 30-year leasing deal

Sorouh Real Estate, Abu Dhabi\'s second largest developer by market value, has signed a 30-year lease agreement for 287 units in its Alrayyana development, the firm said. The developer said it the rental value would “significantly strengthen” its reoccurring portfolio, in a statement to the Abu Dhabi bourse. The deal was made at “prevailing market rates,” it added. The Abu Dhabi-listed firm said this month it expects government projects to become a core part of its developments in the short term. The firm has secured housing projects worth AED5.4bn ($1.5bn) from the government since 2009, and said it is hopes to win further projects. Abu Dhabi in August announced plans to distribute AED2.3bn (about $626m) to more than 1,400 citizens in the form of housing loans, to build homes or renovate their properties. The UAE capital said in June it had ringfenced AED7bn from its 2011 budget funds for housing projects and home loans for citizens, and infrastructure spending. Real estate prices in Abu Dhabi have declined around 50 percent from their 2008 peaks forcing developers to shift their focus to delivering existing projects and government projects. Aldar Properties, the emirate’s biggest property developer, in January sold assets including a Ferrari theme park and convertible bonds to the government for AED19.2bn ($5.23bn) to pay off its debt. The developer in August posted four-fold surge in second-quarter net profit to AED125m ($34m) as it handed over more units and saw a sharp drop in bad debt provisions. Profits for the first half were AED202m, up 33 percent from the year-earlier period. Jones Lang LaSalle warned this month that Abu Dhabi’s real estate market may see fresh pressure in the fourth quarter as an additional 11,000 homes are released to the market. Average real estate prices in the capital declined seven percent to AED 11,000 per sq, representing a 49 percent decline from their peak in 2008, the consultancy said. The rate for apartments is slightly higher at AED 11,900 per sq m, compared to villas at AED10,100 per sq m.