Aldar Properties and the Abu Dhabi government have agreed to swap land in key locations in the UAE capital.
As part of the transaction, the biggest developer by assets in the emirate will receive
infrastructure-enabled territory with a gross area of approximately 3 million square metres. It will be split equally between the prime areas of Saadiyat Cultural District and Mina Zayed, Aldar said in a bourse filing to the Abu Dhabi Securities Exchange, where its shares trade.
The Abu Dhabi government, in turn, will receive lands with a comparable area in Al Raha Beach West and Lulu Island, along with certain plots inside the main island.
The transaction, which will be executed starting this month, does not involve transfer of funds, Aldar said.
“This strategic land swap is a win-win deal for both parties. Aldar Properties will receive infrastructure-enabled land with high potential for development in the coming years, as we consolidate our development focus on our key destinations, in particular Saadiyat Island,” Aldar chief executive, Talal Al Dhiyebi, said.
The Abu Dhabi government receives assets that match its long-term strategic objectives, he said.
“This adds to the careful planning and management of real estate supply, which is key to sustainable development of the market as Abu Dhabi continues to build a vibrant, diversified and sustainable economy,” said Mr Al Dhiyebi.
Aldar owns land in different parts of Abu Dhabi, including on Saadiyat Island.
Last month, the developer unveiled the Dh8 billion Saadiyat Grove scheme close to the cultural district on the island, which will contain 60,000 square metres of retail, entertainment, and leisure space as well as 3,706 residential units. New hotels and co-working spaces designed for start-ups will also be a part of the development. The first phase, with 606 residential and 200 retail units, is scheduled for handover in 2022.
The developer also began selling 306 plots at Saadiyat starting from Dh1.6 million to tap into demand for land in the capital. The project's launch follows three earlier successful land plot sales at Alreeman, Alreeman II and Lea projects, which generated sales of Dh2.4bn for the company.
In July, the government partnered with Aldar to deliver social, economic and infrastructure projects worth Dh5bn across a number of key destinations in Abu Dhabi.
Aldar made a profit of Dh1.35bn on revenue of Dh5bn in the first nine months of this year.
The real estate market in the capital is benefitting from favourable supply and demand dynamics, on the back of fiscal initiatives and economic reforms rolled out by the government in the past 18 months.
These include Ghadan 21, the Dh50bn stimulus package, with a Dh600m fund to attract entertainment and business events to the emirate, and the legislation governing freehold properties in Abu Dhabi.
Changes to the federal visa regulations, including the introduction of a golden class of long-term residency permits and new business licences are also expected to support growth in Abu Dhabi's property market.