Aldar buys commercial tower in Dubai's DIFC for $626 million

The 40-storey tower is due for completion in 2028

Aldar bought the new tower as demand for office remains strong in Dubai. Photo: Aldar

Abu Dhabi's biggest real estate developer Aldar has bought a commercial tower for Dh2.3 billion ($626 million) at the Dubai International Financial Centre amid higher demand for office space in Dubai.

Aldar acquired the 40-storey tower, due for completion in 2028, from H & H Development, the company said in a statement on Wednesday to the Abu Dhabi Securities Exchange, where its shares are traded. The tower will include commercial and retail space and a mix of multi-tenanted and single-tenanted spaces.

The latest deal marks Aldar’s growing footprint in Dubai’s commercial real estate market, with the acquisition of 6 Falak, an office building in Dubai Internet City as well as the announcement on the development of an A Grade office tower on Sheikh Zayed Road and a mixed-use joint venture with Expo City Dubai valued at Dh1.75 billion in October.

Aldar now has commercial assets in Abu Dhabi's and Dubai’s financial districts of ADGM and DIFC, respectively.

“This acquisition not only diversifies our commercial portfolio but also responds to the sustained demand for high-quality office spaces, driven by a favourable macroeconomic backdrop and the UAE’s position as a global business hub,” Talal Al Dhiyebi, group chief executive at Aldar, said.

Dubai’s office market continues to record strong activity as the emirate’s non-oil economy expands.

The average occupancy rate in Dubai's office assets was about 93 per cent at the end of the third quarter of this year, up from 92 per cent a year earlier, according to a CBRE report.

Office rental rates also remained on an upward trajectory, with Prime, Grade A, Grade B, and Grade C offices recording an annual growth of 11 per cent, 21 per cent, 24 per cent and 19 per cent, during the three-month period.

“With limited new office deliveries recorded year to date, and or expected over the remainder of the year, Dubai’s office sector will remain a heavily landlord-friendly market adding further upward pressure to occupancy rates and rentals in the coming quarters,” the report said.

Aldar, which reported a 37 per cent annual jump in its third-quarter profit, is also boosting its residential portfolio in Dubai. The company has established a joint venture with Dubai Holding to develop prime residential communities and has announced the Athlon and Haven projects.

The companies generated Dh4.1 billion from the sale of more than 1,000 villas and townhouses at Athlon in May and Dh1 billion from selling more than 660 apartment units at Haven in July.