Aldar Properties, the UAE’s biggest listed developer, reported a 80 per cent jump in first-quarter net profit as revenue increased and finance costs declined in addition to a one-off gain from the completion of a property transaction with Abu Dhabi's holding company ADQ.
Net profit for the three months to March 31 rose to Dh544 million ($148.1m), the company said in a statement on Monday to the Abu Dhabi Securities Exchange, where its shares trade. Revenue in the period increased 16 per cent to Dh2 billion due to higher property sales.
Last October, Aldar agreed to take over the management and development of government capital projects worth Dh30 billion under a memorandum of understanding with ADQ.
"We have achieved a strong start to the year across Aldar’s diversified businesses, as our new operating model delivers growth and efficiency," chief executive Talal Al Dhiyebi, said. "We will continue to capitalise on the strong demand momentum with exciting new launches."
The group's strong performance was largely driven by a 47 per cent increase in revenue at Aldar Development, while Aldar Investment – the company's arm that manages its recurring income assets – recorded stable income during the period.
Aldar Development, which is responsible for building out the company's 75 million square metre land bank, registered property sales worth more than Dh1bn for the third consecutive quarter, indicating a growing demand for real estate in its home market, the company said.
Abu Dhabi's property market, which a ValuStart report says is expected witness a gradual appreciation in rents and prices by the end of 2021, has seen transactions pick up amid a broader economic recovery. The total value of real estate transactions in the emirate jumped 28 per cent to Dh74bn in 2020, according to the Department of Municipalities and Transport.
The momentum has continued into this year. In April, Aldar said it sold out the second phase of its Noya development on Yas Island within 48 hours.
Aldar also revamped its business earlier this year and now operates on a model where a parent company oversees its core development and investment businesses. Its two main divisions of Aldar Development and Aldar Investment are run by separate chief executives.
Aldar Development reported a 28 per cent rise in first-quarter gross profit to Dh368m while revenue from property development increased 18 per cent to Dh802m.
Aldar Investments, which manages its education, hospitality and leisure assets, said its revenue dropped 5 per cent to Dh736m since the prior year period was unaffected by the pandemic.
"The resilience of the commercial and residential portfolio, and the positive contribution from other parts of the business including Provis and Aldar Education, mitigated the impact the global pandemic had on tourism-oriented assets including retail, hospitality and leisure," the company said.
Aldar, which is investing Dh500m to upgrade Yas Mall, said the project was on track to be delivered in phases over the next 12 to 18 months. The redevelopment plan aims to repurpose 40 per cent of gross leasable area in the mall.
The developer is also expanding into Egypt and is currently leading a consortium to buy a majority stake in Egypt’s Sixth of October for Development and Investment Company.