Meeting all expectations

In February, Abu Dhabi’s biggest developer, Aldar, reported a net profit of Dh643 million for 2011 against a loss of Dh12.65 billion for the same period ending December 2010. “We are fit to take advantage of the opportunities that present themselves,” Sami Assad, Chief Executive Officer (CEO), Aldar Properties, told GN Focus on the heels of the announcement of the proposed Aldar and Sorouh merger (refer to box on ratings). Assad joined Aldar in 2008 as Technical Director and was promoted to the role of Chief Operating Office the same year. In November 2010, he was made CEO of the company.

The year gone by
“2011 was a year of change. We are fortunate in Abu Dhabi to be sheltered from the worst of the continuing uncertain global economic conditions. However, the effect of the downturn has undoubtedly influenced many sectors of the economy and created market conditions that require careful navigation along a path to sustainable growth,” he told GN Focus in an email interview. “Last year, we continued to build on our track record of delivering projects and completed 1,930 residential units, including the Al Zeina and Al Muneera communities at Al Raha Beach and the first phase of Al Gurm, a luxury residential development.” Additionally, a range of properties held for investment were completed and fully let, adding 76,000sqm of new retail, including the IKEA development on Yas Island, Gardens Plaza and Motor World.

So did his prior experience of working hands on as Technical Director at Aldar help him understand the projects inside out? “Obviously, I know Aldar’s projects in detail at an operational level — but it is more relevant to look at the strength of our project teams,” says Assad. “We have the skills as well as an organisational structure that creates deep levels of accountability and a strong focus on key functions.”

One of these functions was assessing market realities. Late last year, he had made a statement to media: “Aldar will be monitoring supply and demand, and making sure it is supplying real demand.” So how did that pan out? “In future, we will selectively target new developments where there is demonstrable demand,” he says.

Rent-to-own projects
The developer also aims to capture existing niches including at the Al Raha Beach project, where it aims to convert tenants to owners. “Al Zeina and Al Muneera have been recently handed over to owners and increasing numbers of people are moving in every day. Around 90 per cent of units at Al Zeina have been sold. Our rent-to-own programme, which allows tenants to convert their rental payments into equity, is now operational at Al Bandar and Al Zeina, and will soon launch at Al Muneera,” says Assad.

Yas Island is an ongoing project, he adds. “In 2011, we delivered the 33,000-sqm IKEA Yas Island store, the largest IKEA store in the Mena region [230,000sqm gross leasable area] and the first element of Yas Island’s wide-ranging retail offering that will culminate in the delivery of Yas Mall in 2013.” Yas Waterworld Abu Dhabi is due to open in the fourth quarter of 2012.

Meanwhile, Central Market, the mixed-use redevelopment in the heart of downtown Abu Dhabi, is also progressing well. While more shops and restaurants open daily at The Souk, leasing and construction preparations are ongoing at Emporium, which is set to become Abu Dhabi’s high fashion destination. “We have leased over 60 per cent of retail space to date, including the first House of Fraser in the Middle East.
 
Construction is estimated to complete in the fourth quarter of 2012. Likewise, construction will be completed later this year on Trust Tower, the 59-storey commercial building offering 72,000sqm of Grade A Premium A office space,” he adds.

The developer is also currently finishing the Al Ward precinct, the final phase of residences at the Al Raha Gardens, in Khalifa City A, Abu Dhabi. Aldar Academies now operates a portfolio of six schools in Abu Dhabi and one in Al Ain delivering high-quality education to around 3,500 children from 4 to 18 years old, he adds. “We launched three schools in September 2011 — Al Bateen School and Mushrif School in Abu Dhabi and the Al Ain International School. These join The Pearl, the Al Muna Primary School and Al Yasmina School,” says Assad.

The developer also holds a fee-based development portfolio, wherein it undertakes major projects including commercial and residential properties, retail developments, hotel and leisure facilities, infrastructure projects, luxury resorts and schools. “In addition, we will continue to generate income by providing development management services to third-party investors and government entities. Our key contracts in progress include Al Falah, a 4,857-villa Emirati housing development for the Abu Dhabi Government, the Dh1.9 billion Cleveland Clinic Abu Dhabi and the Masdar Institute of Science and Technology.

Development is on target at the Al Falah project. “We will achieve completion of 1,000 villas by the end of the first quarter of 2012, with the remaining deliveries scheduled throughout the year. We are constructing the housing and associated infrastructure in liaison with the Abu Dhabi Urban Planning Council,” says Assad. El Seif won the tender for the 2,000-capacity Shaikh Khalifa Mosque, which will serve the residents of the first completed villages and the contractor mobilised in January,
he adds. The developer’s mandate now extends beyong construction.

So what does 2012 look like for Aldar? “We will build on 2011 with major residential deliveries and make significant progress on Yas Mall and the new fee-based projects namely, the Abu Dhabi Plaza — Kazakhstan, Yas Waterworld and the construction management agreement for Central Market,” says Assad. “We will take advantage of the opportunities that present themselves and are ready to enter the next chapter for the company with energy and enthusiasm.”