Our real estate analyst Mai Attia has initiated coverage of Aldar Properties with a Buy rating and FV of AED3.45. Aldar has successfully established a business model that we believe will outperform peers, especially should the property market soften as it has a solid recurring income stream base across various segments. This is a major positive attribute that sets it apart from other developers in MENA, which are primarily reliant on property sales and thus more exposed to earnings volatility. It plans to further expand its investment properties’ segment; investing an additional AED3bn (of which one-third has already been committed) and targeting to increase net operating income (NOI) from recurring income stream business lines by 40% up until 2020. Our FV is based on 0.75x 2016e NAV, in line with the average historical trading discount-to-forward looking NAV and its trading multiples are undemanding, at a P/E of 8.2x for 2016e and 7.9x for 2017e, with relatively strong earnings visibility (Mai Attia). (Read full report)