Aldar-Emaar JV 'imminent' amid first-quarter revenue surge for Abu Dhabi developer

Abu Dhabi developer's revenues at the end of March climbed to Dh1.76 billion

Aldar properties launched a Dh722 million residential project on Saadiyat Island. EPA

Aldar properties, Abu Dhabi’s biggest listed developer, will soon formalise its Dh30 billion joint venture agreement with Dubai’s Emaar Properties to develop UAE and international real estate projects.

“This will be forthcoming very imminently and the teams have been very diligently working together,” Aldar Properties chief financial officer Greg Fewer said on a media call on Tuesday. “We are looking forward to updating the market in coming days on this joint venture.”

Aldar and Dubai’s top developer Emaar formed a strategic alliance in March last year to develop Dh30bn worth of projects. Under the initial agreement, the developers will collaborate on two UAE-based developments: Saadiyat Grove in the cultural district of Abu Dhabi's Saadiyat Island, and the Emaar Beachfront project, a private island in Dubai located between Jumeirah Beach Residence and Palm Jumeirah.

Regardless of the formal agreement, the two projects have been progressing either from design or sales progress “unimpeded”, Mr Fewer said.

In terms of international expansions, the companies will also be announcing the results of “our studies and our jointly agreed development plans”, he said, without specifying the timeline of joint international developments.

“The spirit of our agreement with them is to bring together the talent of and the financial strengths of the two companies and leverage networks of our two companies in growth,” he said. “The exact developments and locations will be studied on a case by case basis,” he said when asked which international markets will be targeted for JV projects.

Aldar Properties, behind mega projects such as the Formula One race circuit on Yas Island, on Tuesday said its revenues for the first quarter of this year climbed 20 per cent to Dh1.76 billion, boosted by rising sales and strong development activity.

Net profit attributable to shareholders fell 17.4 per cent in the first quarter to Dh553m, according to Aldar's regulatory filing to the Abu Dhabi Securities Exchange, where its shares are traded.

“2019 is off to a great start. Our strong sales reinforce Abu Dhabi’s favourable supply and demand dynamics as seen with Alreeman and Lea [projects], Talal Al Dhiyebi," the chief executive of Aldar said.

Recent government reforms, including the introduction of freehold titles for foreign buyers within investment zones in Abu Dhabi, have added to long-term attractiveness of the real estate sector in the capital, and will be positive for sales going forward, Mr Fewer said.

He declined to quantify the impact of the new initiatives on sales this year saying, “It’s hard to place a number on it now, especially if you are talking about something as game-changing as this freehold law is”.

Aldar reported development sales of Dh1bn in the first quarter of 2019, up 49 per cent from a year earlier. The company is guiding Dh4bn of total sales by the end of this year, which reflects its optimism in the Abu Dhabi’s property market, Mr Fewer said.

The company has an overall capital expenditure plan of Dh5.5bn and about 50 per cent of that will be spent this year. Aldar has active developments across its portfolio in Abu Dhabi and has spent about Dh550m from capex in the first quarter of this year, principally on residential developments, Mr Fewer noted.

Aldar said its hospitality unit within its asset management business had a standout quarter, with a 94 increase in net operating income on the back of major events across Abu Dhabi including the Special Olympics.

The asset management division of Aldar in March acquired full ownership of Etihad Plaza and Etihad Airways Centre in a Dh1.2bn non-cash transaction that unwound three existing joint venture agreements with Etihad.  It also sold Al Murjan Tower for Dh289m the same month for an implied 6.6 per cent yield, in line with Aldar Investments’ strategy to realise value and redeploy capital in new high-potential opportunities, the company said.

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