Abu Dhabi: Aldar Properties, Abu Dhabi’s largest real estate developer, posted its second quarter of consecutive growth yesterday on the sale of completed units across its portfolio.
The company posted a net profit of Dh127.3 million in the three months to June against a loss of Dh475.3 million in the same period last year.
The Abu Dhabi Government rescued Aldar in January with a multi-billion dirham support package that enabled it to continue with various projects. The company was forced to sell numerous assets including Ferrari World, the world’s largest indoor theme park, to ease its burden of debt amid tough operating conditions in the capital’s real estate market.
Aldar said revenue for the first six months of the year stood at Dh1.56 billion against Dh427 million in the first half of 2010, attributing the increase to the sale of completed units at Al Gurm, Al Bandar, Al Raha Gardens and the sale of a land plot at Yas Island.
“As with many developers in the UAE, Aldar has faced some very real challenges in meeting their original handover schedules. However, we are now seeing a concerted effort towards completing the existing pipeline of development properties,” said Matthew Green, head of research and consultancy, UAE, at CB Richard Ellis Middle East.
Green says Al Raha Beach is likely to feature prominently over the next 12 months as further residential properties are handed over to the market amid the continuous development of the project’s community facilities.
“With a subdued transactional market and low investor confidence Aldar will be looking towards their completed assets to generate income over the next year,” Green said.
“Although much of the existing pipeline has been pre-sold, upcoming completions at Al Raha Beach and Central Market will still add some additional income [in terms of] introducing properties to the portfolio, which should help to improve overall profitability moving forward,” he added.
Aldar said it repaid borrowings totalling Dh2.69 billion and raised additional financing of Dh4.28 billion including the mandatory convertible bonds worth Dh2.8 billion to Mubadala Development Company.
Shares in the company closed at Dh1.29, up 1.59 per cent, on Abu Dhabi’s bourse yesterday before the results were announced. Investors will get their first change to react to the news when trading resumes on Sunday morning.
“The first half of 2011 has seen a continued focus on our core business, the prioritisation of current projects and cash flow management,” said Ali Eid Al Mheiri, Aldar’s chairman.
“The second half of the year will see continued delivery with the significant handover of residential units at Al Raha Beach and further progress across our development portfolio,” he added.