Emaar sees U.S. housing profits despite subprime
By Himangshu Watts
MUMBAI (Reuters) - Dubai's Emaar Properties, the largest Arab developer by market value, expects its U.S. housing unit to report a small profit this year despite subprime woes, Chairman Mohamed Ali Alabbar said on Monday.
The company has no immediate plans to buy back its shares although it has approval to purchase up to 10 percent of its stock, Alabbar told Reuters in an interview.
Emaar generates about 85 percent of its revenue from property sales in Dubai and most of the remainder comes from its U.S. homebuilding unit, John Laing Homes.
"John Laing, interestingly enough, their price point is close to about $400,000 a home. Subprime buyers, they are the $200,000, $220,000 guys. But of course the liquidity in the market has affected everybody," Alabbar said.
"The U.S. operation will still show a profit this year but small profit," said Alabbar, who is in India in connection with the planned initial public offering of its Indian joint venture Emaar MGF.
The Indian venture hopes to raise up to $1.8 billion next month to buy land, construct buildings and pay loans and hopes Indian investors would take a long-term view and not be rattled by the sharp 7.4 percent fall in Indian shares on Monday.
Emaar's own shares tumbled nearly 7 percent on Monday, its biggest one-day drop in 14 months, as foreign investors sold shares due to a dampened U.S. economic outlook.
Alabbar said the company had no immediate plans to buy back its shares although it had won approval from the UAE stock market regulator to buy back up to 10 percent of its shares. Continued...
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