Aldar aims for $8.4bn in sales this year with plans to issue green sukuk

Aldar Properties aims to increase its sales this year to up to Dh31 billion ($8.4 billion) and is exploring the issuance of benchmark green sukuk this year to support its growth and sustainability ambitions, a senior executive said.

Abu Dhabi’s biggest listed developer, which recorded sales of nearly Dh28 billion last year, has benefitted from the boom in the UAE's property market.

The majority of sales this year will come from the UAE market – covering Abu Dhabi, Dubai and Ras Al Khaimah – followed by Egypt and London, chief financial and sustainability officer Faisal Falaknaz told The National in an interview.

“Dubai and Ras Al Khaimah will start playing a bigger component of [total sales in the UAE] because we launched those developments towards the latter end of last year … this year we'll have the full benefit of selling across all those master plans,” he said.

Aldar also plans to release new units for sale in Ras Al Khaimah and launch a new master development in Dubai in the second quarter of this year, Mr Falaknaz said, without providing further details.

The company is developing new projects in Dubai as part of a joint venture with Dubai Holding. The developer launched the first project, named Haven, last year, recording Dh3.1 billion in sales from the first two phases amid strong investor demand.

“The partnership we have with Dubai Holding is around three masterplans. We remain very committed to activating those plans as soon as possible,” Mr Falaknaz said.

“Those masterplans have a gross development value of more than Dh25 billion. Dubai Holding has been very supportive in terms of helping us expedite the activation of those plots … we hope to do a lot more with them.”

The recent merger of Nakheel and Meydan with Dubai Holding to create “national champions” indicates the “strength of Dubai real estate”, and is good for the market, he added.

The UAE has recorded strong real estate activity as the economy has remained robust on the back of the government's diversification measures and policies to support growth.

Dubai registered a record 1.6 million property transactions across all market segments last year, up 13 per cent on the previous year, while the value of deals rose 20 per cent annually to Dh634 million.

Abu Dhabi's property market also continued to maintain its growth trajectory amid higher demand from buyers.

The ValuStrat Price Index, which analyses changes in property values, grew by 4.2 per cent annually for the UAE capital last year.

Abu Dhabi recorded 2,238 off-plan transactions last year, which represented 75.1 per cent of overall sales and an increase of 39.4 per cent from the same period in 2022. Ready home sales volumes rose by 36.5 per cent annually.

Building green

Aldar is aiming to issue more green sukuk this year as part of its sustainability agenda after raising $500 million through its debut green Islamic bond last year.

The company says it is exploring options for further green issuance this year of similar value to its inaugural one.

“Issuing more debt is going to be dependent on our deployment plan in terms of how much we invest,” Mr Falaknaz said.

“We now have a green framework where we will target … more green financing across all our facilities."

The company is also on track to achieve net zero by 2050 thanks to initiatives including the retrofitting of buildings, low-carbon designs as well as using green concrete and green steel in construction, Mr Falaknaz said.

Aldar has spent about Dh150 million on retrofitting existing assets to help lower emissions.

It is installing solar panels across its assets in partnership with Yellow Door and working with suppliers to procure low-carbon materials for buildings. It is also focusing on sustainability as it acquires properties and is building a new waste treatment plant in Abu Dhabi.

“We take sustainability very seriously. As a company, we are growing very fast, but we want to grow in a very disciplined manner, financially disciplined, but also disciplined from a societal and a community and environmental point of view,” Mr Falaknaz said.

“So be it low carbon design, be it green construction, be it energy efficiency, supply chain, we will be pushing more and more in terms of becoming more aggressive to reach the targets that we have set.”

Acquisition plans

Aldar plans to continue buying more assets to grow its portfolio amid new opportunities.

Last year, the company bought UK developer London Square for Dh1.07 billion, marking its first acquisition outside the Mena region amid plans to expand its global footprint.

In September, the Aldar Estates unit of the company acquired FAB Properties, which provides property management services across the UAE.

Earlier this year, it bought seven central logistics hubs and an adjacent land plot in Dubai Investments Park for Dh1 billion.

“We have announced to the market Dh4 to 5 billion of equity that we are planning to deploy into recurring income assets. So we will be announcing those deals as they come. Logistics is a very important segment that we are very keen on continuing to grow,” he said.

Property market outlook

“I think the market remains to be very healthy. We see indicators within our own business. Our school enrolments are up 25 per cent, our commercial assets are fully leased.

“We've just opened up a new commercial office building … with more than 80 per cent pre-leasing, a lot of those tenants are international tenants. We've seen increased footfall, increased sales in our shopping malls.”

The rate of growth in property prices is going to be “steady” this year following steep increases in prices in the last three years, he added.