(MENAFN- Gulf Times) Qatar's real estate sector saw a splendid performance in its profitability in the first half of this year mainly on account of one-off substantial capital gains on sale of properties by Barwa Real Estate Company.
Otherwise, the sector, which has four listed constituents, had seen plunging profitability by the other three companies Mazaya Qatar, United Development Company and Ezdan Holding; even as market investors find potential with the real estate sector group index vaulting 23.72% during the six-month period ended June 30, 2015 against a 0.69% fall in the Qatar Stocks Exchange's main 20-stock Qatar Index.
The realty sector witnessed more than tripling of cumulative net profit against a 47% increase in the first half of 2014, according to QSE data.
The sector had registered a cumulative net profit of QR4.92bn compared to QR1.49bn in the same period of 2014.
Barwa Real Estate Company, which has outlined a QR15bn capital expenditure for the next five years, had seen its net profit grow more than 16-fold to QR3.45bn.
Mazaya Qatar saw its net profit growth considerably slow down to 8% to QR59.3bn during January-June this year. In the previous-year period, the real estate company had reported more than five-fold jump in net earnings.
United Development Company saw its net profit expansion slowdown to 11.69% to QR557.18mn in the first half of this year. In the year-ago period, the company's net earnings had seen 53% growth.
Similarly, Ezdan Holding witnessed its net profit growth slowdown to 19.5% to QR858.17mn in the first six months of this year. In the corresponding period of 2014, it had reported a 50% jump in net earnings.
However, a section of financial experts have positive outlook on the real estate sector in view of the country's strong commitment to infrastructure upgrade ahead of hosting the 2022 FIFA World Cup.
"The Government has taken concerted efforts to improve and enhance the real estate sector in other areas of the country in order to lessen the concentration in the arterial Doha city and this has led to the development of stronger peripheries, which itself has brought with it the need for more commercial and retail space," one of the experts told Gulf Times.
Qatar, with the highest per capita income in the world, and its growing affluence, has seen higher demand for retail spaces, they said, highlighting the advent of many niche projects such as the Entertainment and Festival cities.
"The demand for retail properties are expected to be stronger in the medium to long term," an analyst with a brokerage company said.
However, another school of thought is that with Qatar feeling the pressure of low oil prices, it may even slip into fiscal deficit earlier by 2016 itself (than the projected 2017). The impact may be felt in the real estate sector also.
They also pointed out the fact the post-2008 global financial crisis had seen severe corrections in the realty segment in Qatar; which led many developers to "put on hold or cancel their projects," one of them said.
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