Aldar’s second-quarter profit surges 52% on higher revenue

Net profit in the three months to the end of June increased to $353 million amid record development sales

Aldar has unveiled several new projects this year as it continues to expand its property portfolio. Sammy Dallal / The National

Aldar Properties, Abu Dhabi’s biggest listed developer, reported a 52 per cent surge in its second-quarter profit as revenue increased, driven by record development sales and strong contributions from its recurring income portfolio.

Net profit for the three months to the end of June climbed to Dh1.3 billion ($353 million), Aldar said in a filing on Monday to the Abu Dhabi Securities Exchange, where its shares are traded.

Revenue and rental income for the period increased by 21 per cent annually to more than Dh3.2 billion.

The company reported first-half development sales of Dh11.6 billion, with 10 new project launches so far this year. The total sales in the first half more than doubled, marking the highest half-yearly sales for the company.

It also recorded the highest-ever quarterly sales of Dh7 billion, up 125 per cent compared to the same period last year amid higher demand from overseas and resident expatriate buyers in the UAE.

“Solid consumer and business confidence is supporting domestic demand, which is translating into strong development sales and high occupancy across the company’s portfolio of prime assets,” Mohamed Al Mubarak, chairman of Aldar Properties, said.

“This is a direct result of the successful socio-economic reforms enacted by the UAE government, which have positioned the country as a premier lifestyle, investment and business destination.”

Aldar is at the heart of Abu Dhabi’s efforts to develop its property sector. The developer continues to expand its portfolio, announcing a number of new deals this year.

Earlier this month, Aldar unveiled a $2.18 billion Yas Island project called Balghaiylam in partnership with the Abu Dhabi Housing Authority to boost the stock of integrated and sustainable residential communities in the capital.

Sheikh Khaled bin Mohamed, Crown Prince of Abu Dhabi and chairman of the Abu Dhabi Executive Council, inaugurated the project, which is expected to be completed by 2026.

Aldar is also looking to develop new commercial assets on Al Maryah Island in Abu Dhabi and expand its property portfolio further.

In March, the company signed an agreement with Abu Dhabi's sovereign wealth fund Mubadala Investment Company to jointly develop commercial assets in the Abu Dhabi Global Market, the capital's international financial centre.

Aldar also plans to develop three new communities in Dubai through a joint venture with Dubai Holding. The deal marks Aldar’s entry into Dubai’s property sector, as part of the company’s broader expansion into new markets.

“We achieved 10 new launches in the first half, more than in full-year 2022, and the investment business has seamlessly integrated new acquisitions, with the total value of Aldar’s owned recurring income asset portfolio increasing by almost a third over the last 12 months,” Aldar's group chief executive Talal Al Dhiyebi said.

The company's first-half profit jumped 38 per cent annually to Dh2.1 billion as revenue grew 18 per cent to Dh6.3 billion.

The company has Dh4.5 billion of free cash and Dh5.9 billion of committed undrawn facilities, “providing the dry powder to pursue attractive growth opportunities”, it said.

“The strategic acquisitions made in 2022 have proven highly successful. These investments have since stabilised and are delivering strong returns that are positively impacting our bottom line,” Aldar's acting chief finance and sustainability officer Faisal Falaknaz, told media.

“We remain in a strong position to pursue further growth. We look forward to launching our development franchise into Dubai and Ras Al Khaimah in the coming months and identifying further opportunities to deploy capital to diversify our recurring income portfolio.”

Aldar plans to develop three new communities in Dubai through a joint venture with Dubai Holding. The deal marks Aldar’s entry into Dubai’s property sector, as part of the company’s broader expansion into new markets.

In Ras Al Khaimah, it announced new deals including the acquisition of the DoubleTree Marjan Island, as well as an adjacent beachfront development plot for Dh810 million.

The UAE property market has continued to recover from the coronavirus-induced slowdown on the back of government initiatives, higher oil prices and other measures to support the economy.

Abu Dhabi recorded 10,557 real estate transactions worth Dh46.33 billion ($12.61 billion) in the first half of 2023 amid strong demand from buyers.

The value of the deals more than doubled during the six-month period, while the volume of transactions, which include property sales and mortgages, rose by 41 per cent on an annual basis, the Abu Dhabi media office reported on Monday, citing data from the Department of Municipalities and Transport.

Dubai's property market also registered strong growth in the first quarter of this year, with total transaction value up 80 per cent annually to Dh157 billion, according to official data.

Total transactions rose 49 per cent to 38,715 during the three-month period.