Alpha Dhabi raises stake in Aldar to become Abu Dhabi developer's parent company

Aldar's financial impact on Alpha Dhabi's earnings will be reflected from the second quarter of this year

Aldar's headquarters in Abu Dhabi. Alpha Dhabi is the single largest shareholder in the developer. Sammy Dallal / The National

Alpha Dhabi Holding, a subsidiary of Abu Dhabi-listed conglomerate International Holding Company, has increased its stake in Aldar Properties to become the parent company of the property developer.

The move reaffirms Alpha Dhabi’s position as the single largest shareholder in the emirate's biggest-listed real estate company, as it continues to expand its property investment portfolio, the company said in a statement to the Abu Dhabi Securities Exchange, where its shares are traded.

The additional shareholding came through Alpha Dhabi’s acquisition of an entity that held shares in Aldar.

The deal has received necessary regulatory approvals, Alpha Dhabi said, without providing any further details.

Alpha Dhabi bought a 12.8 per cent stake in Aldar Properties from Mubadala Investment Company for Dh3.5 billion ($953 million) in April last year. Mubadala remained a long-term strategic investor in the developer with a 25 per cent stake, it said at the time.

In January, Alpha Dhabi bought an additional 17 per cent stake in the developer, increasing the size of its stake to 29.8 per cent.

Alpha Dhabi completed the deal through the acquisition of Sublime 2, Sogno 2 and Sogno 3, which together controlled 17 per cent of Aldar, it said in a statement at the time.

With the completion of the latest deal, Aldar will be treated as a subsidiary in Alpha Dhabi’s consolidated financial statements, the impact of which will be reflected in its financial results from the second quarter of this year onwards.

“We are firm believers and supporters of Aldar’s equity story, vision and strategy, as well as the positive and strong strides it continues to make in growing and scaling [up] its platforms,” said Alpha Dhabi chief executive Hamad Al Ameri.

“As a long-term strategic shareholder, Alpha Dhabi will continue to support Aldar’s management team as they execute its transformational growth agenda.”

Aldar reported a 23 per cent jump in first-quarter profit as revenue climbed on the back of record property sales amid the continued recovery of the UAE’s property market and expansion of the developer's business.

Net profit for the three months to the end of March climbed to Dh668m as revenue rose 31.5 per cent to Dh2.68bn.

The company's strong financial performance was driven by its maturing Abu Dhabi business and its diversified asset base.

Aldar, which has added to its land bank in the UAE, has also expanded into Ras Al Khaimah and Egypt.

“The macroeconomic environment across the UAE and the region remains strong, supported by a rise in oil prices and, with it, sustained economic growth,” Mr Al Ameri said.

The economic, social and regulatory policies and initiatives unveiled by the UAE — such as property ownership laws and long-term residency visas options — are further supporting the real estate market, he said.

“The result is an in-demand asset class across the UAE, the key market in which Aldar operates, as well as new markets it has recently entered into such as Egypt,” he said.

The move to consolidate its stake in Aldar is in line with Alpha Dhabi’s future expansion strategy.

The company seeks to invest Dh8bn in property, hospitality, health care and petrochemicals, as well other promising sectors within and outside the UAE.

In January, Alpha Dhabi acquired a 25.24 per cent stake in Q Holding (previously Al Qudra Holding), which focuses on sustainable development and invests in fundamental growth sectors including property, services and hospitality.

Alpha Dhabi reported sharp rise in its first-quarter net profit driven by a surge in net income, which rose to more than Dh1.97bn, compared with Dh100m in same period in the previous year.

Its revenue during the January-March period rose eight times on an annual basis to about Dh8.2bn.