Aldar Properties' first-quarter profit jumps 23% on record sales

The company plans to spend $1.52bn of its free cash and $900m additional capital from Apollo Global on new acquisitions

epa07509759 Visitors inspect the Al Dar section during the Cityscape 2019 Abu Dhabi exhibition, in Abu Dhabi, United Arab Emirates, 16 April 2019. The real estate event, an annual networking exhibition and conference focusing on all aspects of the property development cycle, runs from 16 to 18 April 2019.  EPA/ALI HAIDER

Aldar Properties, Abu Dhabi’s biggest listed developer, reported a 23 per cent jump in its first-quarter profit, as revenue climbed on the back of record property sales amid continued recovery of the UAE’s property market and expansion of its business.

Net profit attributable to equity holders of the parent for the three months to the end of March climbed to Dh668 million ($182m), the company said in a statement to the Abu Dhabi Securities Exchange, where its shares are traded. Revenue surged 31.5 per cent to Dh2.68 billion.

Group development sales for the reporting period doubled to a record Dh2.2bn, driven by the inclusion of Egypt’s Sixth of October for Development and Investment Company's (Sodic) strong first-quarter performance and continued momentum in Abu Dhabi’s real estate market.

Last year, a consortium of Aldar and one of the region’s biggest holding companies, ADQ, acquired a majority stake in Egypt’s Sixth of October for Development and Investment Company for 6.1bn Egyptian pounds ($386.8m).

“During the first quarter, Aldar not only delivered a strong financial performance, but we also diversified our sources of funding and scaled up our operational capabilities in preparation for further growth opportunities,” Talal Al Dhiyebi, group chief executive of Aldar Properties, said.

“We attracted a major investment from Apollo Global Management, which is driving the accelerated expansion and diversification of our investment property business. We also entered the high-potential market of Ras Al Khaimah through two acquisitions in retail and hospitality, further increasing our geographic footprint, having entered the Egypt market at the end of last year.”

Apollo Global Management, one of the world’s largest alternative investment managers, agreed to invest $1.4bn through Apollo-managed funds and clients in Aldar Properties. This will help the company unlock value and represents one of the largest foreign direct investments in Abu Dhabi’s private sector.

The investment allocates $500m into a land joint venture; $500m into perpetual subordinated notes issued by Aldar Investment Properties; $300m in mandatory convertible preferred equity investment in Aldar Investment Properties; and $100m in common equity investment in Aldar Investment Properties.

Aldar also bought two properties in Ras Al Khaimah this year — Rixos Bab Al Bahr hotel for Dh770m and Al Hamra Mall for $111.6m to expand its portfolio further.

“In the coming months, Aldar will capitalise on a robust deal pipeline to further broaden our asset base. With demand for quality Abu Dhabi property remaining strong among investors and end users, we will also ramp up development activity and new project launches, particularly on the expanded strategic land bank on Saadiyat Island," Mr Al Dhiyebi said.

Tala Al Dhiyebi, CEO, Aldar Properties.

The property market in the UAE, the second-biggest Arab economy, has made a strong recovery from the pandemic-induced slowdown amid several business and social reforms and government-stimulus measures.

Residential property prices in Abu Dhabi increased 1.5 per cent in the 12 months to March, as the wider UAE market made a strong start to the year, according to a report by property consultancy CBRE.

Average apartment prices increased 1.6 per cent in the year to March, to Dh10,904 ($2, 969) per square metre, while average villa prices rose 1.1 per cent to Dh8,850 per square metre.

Abu Dhabi registered real estate transactions worth Dh71.5bn in 2021, according to the Department of Municipalities and Transport. Yas Island topped the list of best-performing areas, registering Dh4.1bn in deals, followed by Reem Island (Dh3.2bn) and Saadiyat Island (Dh2.5bn).

Aldar's UAE sales rose 39 per cent annually to Dh1.5bn, which is the seventh consecutive quarter in which the company has exceeded Dh1bn in residential sales in the Emirates as more overseas customers and resident expatriates purchased property.

Sodic sales in Egypt rose 102 per cent to record its highest-ever first-quarter figure of Dh678m, with projects in West Cairo, including the newly launched ‘The Estates Residences’, accounting for 36 per cent of sales, Aldar said.

The company will continue to look for new acquisition opportunities to boost growth, Greg Fewer, Aldar's chief financial officer told a media call on Wednesday.

Aldar will spend Dh5.6bn of its free cash as well as $900m additional capital “that is still to come from Apollo” over the next 12 months on new acquisitions, he said.

“There are definitely opportunities in the UAE, both in Abu Dhabi and Dubai, and we see great opportunities in Egypt and great opportunities in Saudi. Those markets will continue to be our focus as we look to deploy the surplus capital that we have on the balance sheet.”

Aldar will also launch new projects throughout 2022 as “Abu Dhabi’s real estate market remains strong given the emirate’s growing standing and attraction as a premier investment working and lifestyle destination”, Mr Fewer said.

Earlier this month, Aldar launched a Dh2bn residential villa project, called Fay Alreeman in Al Shamkha, as the company seeks to tap into growing demand for property in the emirate.

The developer also announced the acquisition of 6.2m square metres of land on Saadiyat Island to develop a Dh15bn mega mixed-use project.

The integrated community will include nearly 2,700 residential units, most of which are villas, and will be home to more than 15,000 people when complete, it said.

Aldar also unveiled its Louvre Abu Dhabi Residences project last month, which offers views of the museum and the Arabian Gulf. It will comprise 400 apartments, including studios, one, two and three-bedroom apartments, as well as five penthouses.

Aldar's Abu Dhabi projects - in pictures

Updated: April 27, 2022, 9:47 AM
EDITOR'S PICKS