The realty sector in UAE is likely to return to profitability this year, with the corporate sector all set for sustained growth, say analysts.
According to the latest report released by Markaz (Kuwait Financial Centre) on “What to expect in 2012?”, the corporate earnings have rebounded in UAE during 2011, following the considerable loss suffered in 2010. The sector will moderate to 23percent growth this year, with the banks likely to record a 26percent growth, and telecoms all set to grow by 6 percent, as against a 14 percent decline recorded earlier.
Overall, the UAE economy will depict a 3.8percent growth in 2012, following a 3.3percent growth in 2011. Although the analysts adopted a neutral view of the GCC markets due to lacklustre liquidity and activity, they expressed positivity on Qatar and Saudi Arabian markets, given, their earning potential, market liquidity and positive economic growth prospects.
In 2012, the UAE corporate earnings will touch 23 percent, while Kuwait and Saudi Arabia will show a 19 percent growth each. According to Markaz analysts, the budget for 2012 in Dubai, makes it evident that conservatism and cautiousness is the way to move ahead.
Revenues are expected at the rate of $8.3bn during the coming year in Dubai, majority of which will be from service charges and fee. However, the emirate still struggles with a debt of $15bn, particularly due to Dubai World and Dubai Holding.
The Dubai property sector, while bottoming out, will continue to fight oversupply issues, with residential prices likely to decline by 15percent, as supply continues to surpass demand. Meanwhile, the supply-demand imbalances will also continue to dampen prices in Abu Dhabi, the report said.