Real estate firms in UAE were hit hard by the global financial crisis in 2008 with property prices dropping by about 60 percent from its peak. Nakheel, the developer at the epicentre of the crisis, concluded its restructuring in August and issued the first tranche of a 4.8 billion dirhams Islamic bond to trade creditors exposed to the company's debt. The sukuk could add to the woes of listed builders as it trades at a discount ahead of quarterly earnings expected to start this week. "The Nakheel sukuk is trading at a discount, which may force some companies to take more provisions in their third-quarter earnings," said Mohammed Yasin, chief investment officer at CAPM Investments in Abu Dhabi. "It all depends on the provisions already taken by the companies against the Nakheel restructuring." Dubai's largest listed builder Arabtec is one among the many trade creditors of Nakheel. Meanwhile, Dubai developers like Emaar Properties and Union Properties are set to face more gloom as sales dry up and demand falls. The amount of construction projects cancelled and delayed in the UAE rose to $170 billion in August, Citigroup said in a recent report. "Neither us nor the market is factoring any new sales for property companies in the UAE. However, recurring incomes for Emaar from its hotels will help its cause," said Mazed Azzam, real estate analyst at AlembicHC. "Despite some progress in the beginning of the year, our outlook is still cautious as oversupply and global concerns weigh." The summer and the Muslim Holy month of Ramadan that fell in the third-quarter also saw a dip in sales a drop in hotel occupancy. Most analysts polled by Reuters expect Emaar's third-quarter profits to drop, in line with its performance in the first two quarters this year. Egyptian bank EFG-Hermes forecast a net profit of 386.5 million dirhams, a drop of 32 percent from the year-ago period. Bahrain's Securities & Investment Co (SICO) expects a profit of 328 million dirhams, a drop of 46.4 percent. Emaar's financial strength comes from its recurring income from hospitality sector. Moody's upgraded ratings on Emaar this week citing improved operating and financial performance on the back of increasing contributions from its recurring revenue segments in 2010 and the first half of 2011. FUTURE UNCLEAR FOR ALDAR Aldar Properties, Abu Dhabi's largest developer by market value, is likely to see modest profits from the sale of some of its residential units. However, concerns have been raised about the company's ability to repay a massive debt pile and the government's growing stake in the company. The developer was rescued by a $5.2 billion bailout by the Abu Dhabi government earlier this year. "Dilution of shares is the biggest concern about Aldar for equity investors," said an Abu Dhabi-based real estate analyst. "After the 2.8 billion dirham convertible bond, state fund Mubadala will hold over 50 percent stake in Aldar. A single government entity holding that much stake is worrying." The company's shares dropped to an all time low on Tuesday, falling below one dirham. Sorouh , Abu Dhabi's second largest developer, is expected to fair better as they factor in revenues from the handover of some units. "Sorouh may surprise us with good third-quarter earnings," said Azzam. Three analysts polled by Reuters forecasted the property firm's earnings to double to about 130 million dirhams in comparison to 59.3 million dirhams in the same period last year. The developer secured housing projects worth about 5.4 billion dirhams ($1.5 billion) over the last two years from the Abu Dhabi government.