RAK Real Estate Ltd - Preliminary Financial Results

RAK REAL ESTATE LTD ("the Company")

PRELIMINARY FINANCIAL RESULTS FOR THE PERIOD ENDED 31 DECEMBER 2009

STATEMENT BY THE BOARD

We are pleased to announce the results for the year ended 31 December 2009. The loss for the period was 225,105 Kuwaiti Dinars, attributable to the ongoing development of the Company's early stage assets and administration of the business.

2009 was a difficult year for the global economy, although the situation in the MENA region was slightly better than rest of the world. Kuwait, where the Company has several projects, experienced a drop in GDP (primarily due to a decline in oil prices and production levels) and a slight correction in its
real estate market.

Declines in the value of the Company's assets and developments in Kuwait were largely offset by gains in asset values from land development projects in Lebanon by the Company during the period. Lebanon benefited from strong economic growth, continued large remittances from Lebanese working abroad, large inflows of foreign capital, population growth and robust tourism. Despite the considerable rise in property prices in Lebanon, such prices remain competitive relative to comparative property prices in the MENA region at large.

Progression of the Company's projects has been slower than expected, particularly in Salmiyah, where the Company has taken more time to clear the development site of tenants than previously expected. The Company is pursuing legal proceedings against the remaining tenant, which is ongoing. The Company was paid a penalty by the contactor for their failure to clear the site in the prescribed time period.

OUTLOOK

Improved oil demand and government spending will be the main driver of Kuwait's growth in 2010. GDP in Kuwait is expected to pick up substantially in 2010. According to reports by National Bank of Kuwait, this has translated into an increase in activity in the real estate sector for the first quarter of 2010.

Real estate transactions in Lebanon in the first quarter of 2010 jumped by 41 percent compared to the same period of 2009, reaching a little more than US$2 billion, according to figures released by the Directorate of Real Estate in Lebanon.

We continue to believe that those markets offer excellent potential and will perform well as the global recovery progresses.

The Company continues to seek appropriate suitable MENA Real Estate Businesses as the Company believes these offer material opportunities for growth and enhancement in shareholder value. Indeed, the Directors are actively considering a number of specific projects in the region. We will update shareholders in the coming months on progress. It remains the Company's intention to become an industry leader in the real estate investment arena in MENA Countries. The Company will continue to seek the optimum utilisation of shareholders' funds and market opportunities thereby maximising shareholder value.

AKNOWLEDGEMENT

We would like to thank our shareholders, senior management, and operational staff 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. We will announce the audited results as soon as possible.

Rafed Al Khorafi

Chairman
FOR AND ON BEHALF OF THE BOARD

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