Aldar Properties, Abu Dhabi’s biggest listed developer, reported a 21 per cent jump in its full-year 2021 profit, as revenue climbed on the back of record property sales amid continued recovery of the UAE’s property market.
Net profit for the 12-month period to the end of December climbed to Dh2.3 billion ($644m), Aldar said in a statement to the Abu Dhabi Securities Exchange, where its shares are traded.
Revenue for the financial year rose two per cent annually to about Dh8.6bn. Sales for the reporting period doubled to a record Dh7.2bn, supported by successful new project launches across different price points that broadened the company’s customer base.
“Aldar’s robust performance in 2021 represents a resilient business that is diversifying and transforming at pace, and highlights Abu Dhabi’s appeal as a premier global investment destination,” Mohamed Al Mubarak, chairman of Aldar Properties, said.
“Confidence in the emirate’s real estate market continues to strengthen as a result of the successful economic and social reforms implemented by the Abu Dhabi government and was demonstrated by the sell-out launches that delivered Aldar’s highest-ever annual development sales.”
With Aldar’s new operating model, introduced last year, the company’s future growth will be “underpinned by geographic and business diversification, strategic investments, and acquisitions in core sectors", Mr Al Mubarak said.
The property market in the UAE, the second-biggest Arab economy, has made a strong recovery from the pandemic-induced slowdown amid business and social reforms and government stimulus measures.
The capital values of villas and apartments in Abu Dhabi rose to their highest level in five years in the fourth quarter of 2021, underpinned by a broader economic recovery, according to property consultancy ValuStrat.
The ValuStrat Price Index (VPI) for Abu Dhabi, which monitored five villa communities and five apartment areas in the emirate, jumped 11 per cent on an annual basis to 70.2 points in December. The valuation-based index that tracks the change in capital values for a representative fixed basket of properties rose 2.1 per cent on a quarterly basis.
Pent-up demand and improved investor sentiment have also helped to drive property sales in Abu Dhabi. New initiatives, such as visas for retirees and the expansion of the 10-year golden visa programme, are expected to further support the property market, industry experts said.
The emirate completed 3,932 property transactions, which included $3.1bn in mortgages and $1.25bn in cash sales. About 2,224 mortgage transactions and 1,708 sales transactions were concluded during the period, the department said.
Aldar said its earnings were driven by a strong performance of Aldar Development's business and growth in Aldar Investment’s recurring income portfolio.
Aldar Investment's business was driven by strong rental rates and leasing activity across the company's portfolio, which ended the year at 93 per cent occupancy. Yas Mall in Abu Dhabi benefited from a successful redevelopment, ending last year with a 97 per cent occupancy rate.
Aldar Development recorded its "highest-ever" revenue backlog of Dh5.9bn, "supporting visibility and predictability of future revenue", along with the steady ramp-up of the fee-based business with projects backlog reaching Dh41.1bn.
"Our development business’ annual sales record and strong revenue backlog coupled with the robust occupancy performance and leasing growth across Aldar Investment’s portfolio demonstrates the resilience of our diversified business and strong execution capabilities," Talal Al Dhiyebi, group chief executive at Aldar Properties, said.
Aldar Development recorded property sales of Dh1.1bn in the fourth quarter of 2021 as investors capitalised on project launches including multiple phases of Noya and Yas Acres, Al Gurm and the third phase of Saadiyat Reserve.
Sales were supported by a broadening customer profile. The overseas and resident expat customer segment showed strong demand throughout 2021, representing 44 per cent, up 32 per cent from the previous year. Yas Island remained the key area, with developments on the island accounting for 62 per cent of the total value of sales in 2021, Aldar said.
The company's capital expenditure last year was Dh6.9bn, pushing its backlog of projects to Dh41.1bn.
Looking ahead, Aldar is planning to expand its portfolio of investments and its footprint outside its home market of Abu Dhabi. Aldar currently has liquidity of Dh9bn on its balance sheet, providing significant "dry powder for growth", it said on Wednesday.
It will look to invest at least Dh5bn "free cash" in growth opportunities this year, Greg Fewer, Aldar's chief financial officer told a media call on Wednesday.
"We have a pipeline [and] we believe we can deploy that," he said. "We will look to modestly level anything that we went into but we want to deploy our surplus capital pile as quickly as we can."
The company sees the "richest pipeline" for investment this year in recurring revenue assets, Mr Fewer added.
A consortium of Aldar Properties and one of the region’s biggest holding companies, ADQ acquired a 85.52 per cent stake in Egypt’s Sixth of October for Development and Investment Company for 6.1bn Egyptian pounds ($386.8m) in the fourth quarter of last year.
Earlier this month, the company bought Al Hamra Mall in Ras Al Khaimah in a Dh410 million deal, marking Aldar Investment's first transaction outside Abu Dhabi.
The company is seeking consolidation opportunities within the UAE, particularly in Abu Dhabi's real estate market across retail, commercial, office, residential, education, warehousing and logistics segments, Mr Fewer said in November.
"Looking ahead, we are ready to finalise landmark transactions, deploy capital efficiently in new opportunities, and execute on our transformational growth strategy across geographies, businesses and sectors,” Mr Al Dhiyebi said.