RAK Real Estate Ltd - Annual Financial Report

RAK Real Estate Limited(the "Company")
Consolidated Financial Statements and Auditor's Report
As of 31 December 2010
 
Chairman's Statement
 
We are pleased to announce the results for the twelve months period ending 31 December 2010.
 
The loss for the period was 2,299,694 Kuwaiti Dinars, attributable to the ongoing development of the Company and the replacement of the Salmiya project with projects in other areas of the Middle East including Jordan.
 
Progress of the mid construction, prime Al Sharq district 36 level A-Grade commercial tower and retail project, is on hold whilst the Group (as defined herein) continues to negotiate its banking facilities with the lenders. Shareholders will be updated on this in due course.
 
In order to more diversify the Companys asset base, RAK is securing two residential projects in Amman, Jordan and a further plot of land for the development of an international hotel also in Jordan. More details will be announced as they develop.
 
OUTLOOK
 
2010 was a challenging year for the region on a whole. Real GDP growth in 2010 for Kuwait was estimated by the IMF at 2.2% after falling by 4.5% in 2009. The IMF predicts real GDP growth in Kuwait for 2011 to increase to 4.4%.
 
Kuwait remains the world's fourth-biggest OPEC producer, possesses roughly 8% of the world's total oil reserves, and produces around 2.3 million barrels of oil a day.
 
Kuwaits sovereign rating was upgraded by credit agency Moody's Investors Service in August to 'Aa2' with a stable outlook.
 
This coupled with the Governments approved non oil-sector stimulus plan, the Kuwait Development Plan 2013/14, leads us to be encouraged about our medium to long term prospects in Kuwait City.
 
Jordans real GDP growth rate in 2010 is estimated to be 3.2%, substantially higher than 2009s 2.8% growth. Although GDP per capita is much lower than those economies of the GCC states, we believe the Country affords large growth prospects of an increasing middle class.
 
Jordan is classified by the World Bank as a "lower middle income country." The per capita GDP is $4,700. Education and literacy rates and measures of social well-being are relatively high compared to other countries with similar incomes.
 
RAK believes Jordan offers an investment climate with significantly less political risk than some of its neighbouring countries and will continue to seek and develop opportunities in the region.
 
ACKNOWLEDGEMENT
 
As ever, we would like to take this opportunity to thank our shareholders, senior management, operational staff, and advisors and for their continued support for the Company. We are dedicated to delivering excellent returns and we remain confident about the Company's long term prospects.
 
 
Rafed Al Khorafi
Chairman

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