Shares in the Abu Dhabi-listed developer Aldar Properties rose 5.6 per cent to their highest level since 2010 yesterday after it emerged that the company was considering spinning off its buildings and maintenance arm Khidmah.
“Operating increasingly as a stand-alone business, we believe there is a strong case to consider listing the company in the coming years,” said Abubaker Seddiq Al Khoori, the chairman of Khidmah and Aldar.
Aldar, which owns 60 per cent of Khidmah, reported that the asset manager's profits had increased 90 per cent during 2013 to Dh19 million, while revenues increased 22 per cent to Dh156m.
“I see little in this announcement to justify such a share price jump,” said Julian Bruce, a director at EFG-Hermes. “Any news like this tends to be well received, especially by retail investors. But the devil is in the detail, which has not yet come out.”
Aldar acquired its stake in Khidmah last year after it merged with rival property developer Sorouh.
Sorouh established Khidmah in April 2009 as a joint venture with Dubai-based Capital Investment as an in-house property management company at a time when the economy was floundering and the company was looking for alternative sources of revenue.
However, since then Khidmah has found a niche for itself in the Abu Dhabi market and has taken on more work for other property companies.
Khidmah also reported that it had been awarded more than 25 new contracts since 2013 and that 78 per cent of revenue was generated by third party clients.
The company provides facilities management to maintain 10 Aldar communities comprising 12,000 homes as well as 450 Hydra Properties villas.
It also provides property management where it finds tenants and manages voids for 6,600 homes, of which about 3,000 are owned by Aldar.
Last week Musanada, the facilities management and shared services arm of the Abu Dhabi Government, awarded Khidmah a Dh54m contract to manage 225 mosques in the Western Region and a Dh34m contract to provide facilities management for 27 government buildings in Al Ain for three years.
Since the start of the year, Khidmah has also been appointed by Mubadala to clean 10 of its sites as well as the First Gulf Bank Arena in Zayed Sports City.
Khidmah is the latest in a long line of UAE property firms weighing up an IPO this year as high stock market valuations tempt company owners to consider a float.
The Dubai-based property company Damac listed on the London Stock Exchange earlier this year. The UAE's first real estate investment trust, Emirates Reit, is set to list its shares on Nasdaq Dubai tomorrow. And Dubai-based Emaar Properties announced last month that it was planning to list its malls business in Dubai and London and would consider spinning off other parts of the business if appropriate.
lbarnard@thenational.ae
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