Aldar Properties' second-quarter profit climbs 55% on stronger demand

Aldar Properties, Abu Dhabi’s biggest listed developer, has reported a 55 per cent increase in its second-quarter net profit, driven by strong local and international demand for existing inventory and new property launches in the UAE.

Net profit attributable to owners of the company for the three-month period to the end of June climbed to Dh803.9 million ($219m), Aldar said in a statement to the Abu Dhabi Securities Exchange, where its shares are traded. Revenue and rental income for the period rose about 22 per cent annually to Dh2.7 billion.

Aldar's group revenue backlog at the end of June rose 168 per cent on an annual basis to Dh11.38bn, provides strong visibility on future revenue in both UAE and the company's operations in Egypt.

The projects backlog at the end of the April-June period climbed to Dh57.6bn, from Dh41.2bn at the end of the first three months of the year, driven by project additions across infrastructure, community buildings, schools and national housing sectors, Aldar said.

“Aldar continues to execute on its transformational growth agenda as we consolidate our position as the leading real estate developer and manager in the UAE,” Talal Al Dhiyebi, group chief executive, said.

“Our diversified business continues to grow from strength to strength with a buoyant market sentiment in Abu Dhabi, underpinned by strong economic fundamentals. We achieved robust development sales driven by substantial demand from end users and international investors.”

The company's fee-based business also gathered momentum with a significant ramp-up in government projects and “our investment property portfolio showed continued strength in terms of occupancy, income and value appreciation”, Mr Al Dhiyebi said.

Pent-up demand and improved investor sentiment have helped to drive property sales, particularly in Dubai and Abu Dhabi, which is encouraging developers to launch new projects and further invest in acquiring assets to diversify their portfolios. The property market in the UAE bounced back strongly from the pandemic-driven slowdown in 2021 and the trend has continued this year as the Arab world's second-largest economy remains on a strong growth trajectory.

The UAE's economy is set to post its strongest annual expansion this year since 2011 after it grew by 8.2 per cent in the first three months of 2022, on higher oil prices and measures that stemmed the impact of Covid-19, according to the Central Bank of the UAE.

Net profit attributable to owners of the company for the first half of the year increased 38 per cent to Dh1.47bn as the developer registered record sales, which increased 26 per cent in the three-month period to Dh5.33bn.

“Looking ahead, we remain focused on delivering new development launches and remaining active on the acquisition front as we continue to deploy capital effectively in value-accretive opportunities,” Mr Al Dhiyebi said.

The company deployed and committed more than Dh11bn of capital in the first half of the year as it diversified its portfolio and expanded into new markets and sectors.

It said it will continue to look for acquisition opportunities. It has Dh10bn in cash on its balance sheet, Dh5bn of which will be used as “equity to go into future acquisitions” over the next nine to 12 months, Greg Fewer, Aldar's chief financial and sustainability officer told reports.

On Thursday, Aldar agreed to buy four prime commercial towers from Mubadala Investment Company in Abu Dhabi Global Market, the international financial centre in Abu Dhabi, located on Al Maryah Island, in a Dh4.3bn deal.

In February, Aldar struck a $1.4bn deal with Apollo Global Management, one of the world’s largest alternative investment managers. As part of the deal Apollo will invest $1.4bn through Apollo-managed funds and clients in Aldar Properties, which will help Aldar unlock value.

The deal is one of the largest foreign direct investments in Abu Dhabi’s private sector and will spur Aldar's long-term growth.

“Backed by a strong liquidity position and the additional firepower from Apollo Global Management’s investment, we are well-positioned to further progress our transformational growth strategy. This enables us to add further scale to our portfolio, specifically in the education and logistics sectors, as well as expand our geographical footprint across UAE, Egypt, and Saudi,” Mr Al Dhiyebi said.

On Wednesday, the developer said it was buying Ras Al Khaimah DoubleTree by Hilton Resort and Spa Marjan Island, as well as an adjacent beachfront development plot for Dh810 million.

The acquisition was its third in Ras Al Khaimah this year, after deals to buy Al Hamra Mall and Rixos Bab Al Bahr in February and April, respectively.

The company also plans to acquire assets in Dubai as part of its expansion within the Emirates, Mr Fewer said.

“We've looked at Dubai for a long time. It's a very interesting, exciting and dynamic market and there's all kinds of options,” he said, adding that a debut in the emirate could be through a joint venture or acquisitions

“We're exploring all of those alternatives as we map out the optimal time and format to enter the Dubai market,” Mr Fewer said.

“Watch this space,” he said, when asked whether a deal could take place in Dubai this year.