UAE developer Aldar announces $1.4bn investment plan
Abu Dhabi’s Aldar Properties has earmarked 5.2 billion dirhams ($1.4 billion) for capital spending over the next two years, its chief financial officer said on Tuesday.
Greg Fewer was speaking after the emirate’s largest listed real estate developer reported a 14.1 percent rise in first-quarter net profit, maintaining its run of posting rising profits in 10 of the last 11 quarters.
Much of this year’s spending will go towards closing out large projects it has now completed, as well as putting infrastructure in place to help with unit deliveries from 2017, company executives told a conference call.
Abu Dhabi’s real estate market was stable in the first quarter, according to consultants JLL, having flattened out in 2015 after two strong years of growth. According to another consultant, Cluttons, the value of villas fell by 1.4 percent during the period while apartment prices remained unchanged.
Aldar, however, has continued to announce new schemes, including the 6 billion dirham Yas Acres golf and waterfront development due to be completed by the end of 2019.
Executive Director Talal al-Dhiyebi said on the conference call that while the company was helping customers with more flexible payment plans for properties, it was not reducing its prices in response to the slowdown.
During the first quarter, Aldar sold 320 units worth 940 million dirhams in off-plan development sales, according to a bourse statement. It did not give a comparative figure.
Despite the slowdown, Aldar’s profits are continuing to grow, supported by recurring income from sites such as Yas Mall.
The majority state-owned firm which built Abu Dhabi’s Formula One circuit made a profit attributable to equity holders of 649.0 million dirhams ($176.7 million) in the three months to March 31, up from 568.7 million a year earlier, according to the bourse statement.
SICO Bahrain had forecast Aldar would make a quarterly profit of 453.6 million dirhams.
Aldar’s first-quarter revenue rose to 1.23 billion dirhams from 1.18 billion a year earlier.
“We have got a predictable recurring revenue asset base that will grow at inflationary levels,” Fewer said.
Aldar’s debts stood at 6 billion dirhams at the end of March, a level the firm is happy to maintain, said Fewer.
In February, Aldar said it was planning to extend the maturities of its debt and was in talks with banks
($1 = 3.6728 UAE dirham)