Dubai: Aldar Properties isn’t done with destination building. The developer of the Yas Mall and its adjoining racing circuit as well as signature properties such as the World Trade Centre Abu Dhabi is coming back for more. And with enough reasons.
“We will continue to build on our destination development strategy and recently launched West Yas and Mayan on Yas Island, and Meera in Shams Abu Dhabi on Reem Island as we continue to see demand for high quality communal residential assets,” said Talal Al Dhiyebi, Chief Development Officer. “This is supported by the performance of our current developments that continue to outperform the wider residential market.”
On its web site, Aldar gives a hint that a new launch is headed investors’ way, timed with next’s Cityscape Abu Dhabi. It calls on prospective investors to register and be among the “first to know” about the new “living experience”.
“Our land bank is certainly significant — at 77 million square metres. Seven million of this is on Yas Island — one of our major focus points as we develop Mayan, West Yas and Ansam to complement the existing entertainment and lifestyle amenities on the island. We also have 3.6 million square metres of Al Raha Beach to develop — and that is just two of our main land plots.
“We have the land, we have the ambition, and we are proving that we can deliver over the near, medium, and long term.”
So much so, Aldar seems to be the sole developer to keep on adding to the project pipeline in Abu Dhabi. If one were to exclude Aldar from the equation, the pace of new launches in the emirate has subsided significantly, especially in the residential space. Private developers are focusing more on opportunities in retail and hospitality, biding their time with residential releases until the next upturn comes around.
UAE nationals
Which sort of leaves the field open for Aldar to lock in much of the buying activity in the emirate for itself. In recent quarters, the developer has seen fit to raise the number of buying options exclusively for UAE nationals and which “are selling well — particularly West Yas”.
But shouldn’t the slackness in overall buying activity within Abu Dhabi get Aldar to space out their launches? More so, since they have the residential space — seemingly — all to themselves?
Al Dhiyebi gives a guarded response — “We are always watching the market, talking with other participants and listening to what our customers are saying. This, in addition to our own experience, helps us to ensure we only bring the right products to the market at the right time.
“We continue to see demand in high quality communal residential assets — so we will launch projects to satisfy demand if in-line with our development guidance.
“Of course we have to address what the market wants in terms of real estate. And this is why we always ask ourselves if we are delivering the right product, at the right time and for the right price.
Value and quality
“We continue to see demand in our primary destinations of Al Raha Beach, Shams Abu Dhabi and Yas Island. We shouldn’t think purely about price, but in terms of value and quality. Shams Meera which we launched last year shows us that affordable doesn’t have to mean compromise on quality.”
And the developer is not too keen on picking up options in markets outside of its home territory. “Abu Dhabi is our home market, and it is here where we are focused on delivering the best quality real estate that we can. We have a great number of projects under development, be it Al Jimi Mall in Al Ain, Ansam, Hadeel, West Yas, Meera, Mayan to keep us busy. So, right, now we aren’t looking to other markets.”
There is also more that it can try and get from its existing assets, not least the Yas Mall. Since the November 2014 opening, the retail behemoth has had 20 million visitors trooping in, of which 18 million did so last year alone. (Talk of a spin-off of Aldar’s retail assets is premature, Al Dhiyebi makes it clear.)
Aldar’s hospitality interests, meanwhile, had a 79 per cent occupancy last year. “Occupancy is stable, but given the prime location of the majority of our hotel portfolio — and with Yas Island continuing to grow — we are confident that this is still a key part of our diverse portfolio,” Al Dhiyebi said. “As well as this, given how close we are to the new airport which will open next year, there is still room to grow further.”
Factbox: Paring down the debt levels and much more
* As of December 31, 2015, Aldar Properties had a debt exposure of Dh6 billion after the developer paid off another Dh3.1 billion during the year. “This is in line with our policy to maintain gross debt at 35-40 per cent against the value of our recurring revenue assets,” said Talal Al Dhiyebi. “We are very comfortable with our debt levels right now.”
* Aldar’s stated goal is to generate recurring revenues of Dh2.2 billion by 2020. “Clearly rental income is a big play for us, and it complements our development business very well,” Al Dhiyebi said. “We have already committed 30 per cent of this plan, which includes the acquisition of Daman House earlier this year.”
* The recent passage of Abu Dhabi’s real estate laws invests Aldar with the status of “master-developer”. “We have always been a master-developer, but the award of a license that confirms that status under the new law shows we are serious in ensuring that we comply with the new requirements,” said Al Dhiyebi.
