Dubai: Abu Dhabi master-developer Aldar is feeling the full benefits from steady off plan launches and its intent on delivering ongoing projects. Net profit for the first nine months of 2021 are at Dh1.54 billion - and that comes from a 28 per cent year-on-year increase.
In the July to end September period, the company recorded development sales of Dh2.69 billion - its highest ever in any quarter. A “diversifying residential buyer and investor profile with increasing number of younger and female buyers” was cited by the developer for the sales spike.
"Aldar’s strong financial and operating performance this year continued into Q3, reflecting our ability to sustain growth," said Talal Al Dhiyebi, Group CEO. "As post-pandemic recovery gathered momentum, our diversified businesses continued to rebound at pace, with the third quarter delivering Dh2.69 billion in development sales, complemented by solid leasing activity for our retail and commercial investment property portfolios."
Aldar was the first developer in the UAE to get back into offplan launch mode after the COVID-19 created break and it has kept the launches coming through periodically this year as well, focussed mostly on the Yas Island.
"We expect to see operating activities across our commercial and retail assets continue to grow in line with the macroeconomic recovery that is well underway," the CEO added. "Aldar continues to seek attractive and value accretive investment opportunities to grow our portfolio of operating assets and we plan to bring more new developments to the market, driven by our expanding client base, including overseas investors.”
Last quarter, the Abu Dhabi company also made a push into Egypt through an offer for SODIC, one of the bigger players in that market.
Revenue gains in same trajectory
With first nine-month development sales at Dh6.14 billion, Aldar’s overall revenues for the period was Dh6.32 billion, up 8 per cent on 2020. Gross profits were at Dh2.43 billion. (In another big silver lining, the revenue backlog also hit a record Dh5.86 billion, “supporting future revenue visibility”.) All of the new sales generation is helping Aldar solidify its cash position, which was split between Dh3.6 billion of unrestricted cash and Dh4 billion in undrawn committed facilities. These will help with ‘sustainable long-term growth opportunities,” the developer said.
Tellingly, the retail portfolio - with assets such as Yas Mall - also recorded a bounce back, with higher footfall and sales reaching up to “near pre-Covid” levels.
Update on Egypt deal
Aldar is still awaiting regulatory clearance in Egypt for the SODIC acquisition. Aldar has aligned with another Abu Dhabi entity - ADQ - in putting up the offer.
It was earlier this year that Aldar spoke about an entry into new markets, reflecting a change in its operational model and an exclusive focus on its home base.
SODIC is one of the bigger names in the Egypt real estate space, with a portfolio that spans mostly upscale masterplanned communities.
Aldar also sees opportunities opening up to acquire large land banks in Abu Dhabi - and elsewhere in the UAE. That would include retail and educational assets as well as residential, according to Fewer. Plus, there will a closer inspection of possibilities in the logistics and warehousing, which after the pandemic led disruption has become hot property.
“We think there is possibility for lots of consolidation in Abu Dhabi,” said Greg Fewer, Chief Financial and Sustainability Officer. “Aldar has the strong ability to make transformational acquisitions.”
Of course, it has the cash in hand to make those deals possible, when one shows up The near Dh7 billion has its uses. “It is important to remain liquid when large portfolios become available suddenly,” said Fewer.