Vaulting from runner-up to second place — the position it most recently held in its 2011 debut — is Bank of America Merrill Lynch. Dubai-based Abdelrali El Jattari and a colleague in London report on ten regional real estate companies and believe that Emaar Properties of the United Arab Emirates is a standout. The global property developer has long been their top pick in the Middle East & North Africa, El Jattari reports, and that has been a great call. Emaar’s shares bolted 50.4 percent year to date through May, rising to 10.45 dirhams and besting their peers by 42.9 percentage points, after rocketing 103.8 percent in 2013, against a sector decline of 6.1 percent. The analysts credit the company’s “continued strong retail growth, sustained profitability from Dubai hotels — reaching an all-time high gross margin level,” he explains, “and accelerating project launches and developments in Dubai, which should lead to improving free cash flow.” In Turkey their favorite name this year has been Emlak Konut Gayrimenkul Yatirim Ortaklig, a residential property developer than outperformed the sector by 20.1 percentage points this year through May, climbing 27.6 percent, to 2.68 lira. “We expect the stock’s positive momentum to continue on forthcoming catalysts, says El Jattari, “including upcoming project launches and potential land acquisitions and tenders, combined with an attractive valuation.” Their 12-month price objective for Emlak is 3.40 lira. |
The 2014 Emerging EMEA Research Team: Real Estate, No. 2: Abdelrali El Jattari & team