Handovers push profit rise at Abu Dhabi’s Sorouh

Sorouh Real Estate, Abu Dhabi's second-largest developer by market value, posted a 13.4 percent rise in third-quarter net profit aided by higher handovers and increased rental income but the results missed analyst's forecasts. Abu Dhabi's second largest developer by market value posted a net profit of AED67.3m ($18.3m) compared with AED59.3m in the same quarter last year, it said in a statement on the Abu Dhabi bourse. Analysts forecast average net profit AED129.6m net profit for the third quarter. The developer's third-quarter revenues more than doubled to AED890.4m compared with AED387.8m in the same period in 2010. That was offset by a surge in cost of revenue which increased to AED720.4m as against AED196m for the year earlier period. "We continue to see pick-up in sales and leasing demand during the period, partly driven by our innovative lease to own and rent to own products," Abubaker Seddiq Al Khouri, Soruouh's managing director said in the statement. Most Abu Dhabi developers have been focusing on completion and delivery of existing projects after suffering big losses during the global financial crisis, which put an end to a six-year construction boom. Sorouh said earlier this month that it expects projects awarded by the government to be a core part of its developments in the short term. Abu Dhabi's real estate market may see an additional 11,000 homes in the fourth quarter, a report by property consultants Jones Lang LaSalle said. Sorouh shares have lost 40 percent of its value so far this year.