Aldar planning more mid-income schemes in Abu Dhabi

The Aldar headquarters in Abu Dhabi. The company has announced its first quarter results. Christopher Pike / The National

Aldar Properties plans to add mid-income housing to developments such as Shams Abu Dhabi and Al Raha Beach following the success of its Meera Shams scheme launched in June last year.

The Abu Dhabi developer on Tuesday reported a 15 per cent year-on-year increase in first quarter profits to Dh654 million.

“On the middle income segment, we are planing more of those kinds of development across our key destinations. That will be a recurring theme within our development pipeline,” said the chief development officer Talal Al Dhiyebi.

Aldar sold 90 per cent of the 408-unit Meera Shams scheme in less than six months.

“We are now in design stages for similar products to Meera,” he added.

Mr Al Dhiyebi did not say when the new homes would be built.

Aldar recently launched the Dh6 billion, 1,315-villa Yas Acres scheme and is seeing “very strong demand”, he said.

During the first three months of 2016, the company sold 320 homes, generating Dh940m in sales.

Of these, 132 were sold at its West Yas project for Dh616m and 188 were sold between the Mayan, Meera and Al Nareel projects for a combined Dh324m.

In April, it released a further 144 units at Mayan on Yas Island, bringing the total number of units launched to 512.

“I think the real estate market is still strong in Abu Dhabi,” said Mr Al Dhiyebi. “Demand and supply for quality products in Abu Dhabi has been relatively balanced.”

Average selling prices at Mayan were Dh1,400 to Dh1,500 per square foot, which is “slightly higher” than the prices it was selling units at its Ansam and Hadeel developments 12 months earlier.

The company attributed strong profit growth to a 10 per cent increase in gross profit for recurring revenues, due partly to Yas Mall reaching capacity.

About 61 per cent of the Dh1.23bn of revenue generated in the quarter – a 4 per cent year-on-year increase, came from recurring sources.

Aldar’s chief financial officer Greg Fewer said that about one-third of its recurring revenue comes from retail, another third from residential schemes and the rest from hotels, schools and other sources.

He said it wants to invest about Dh3bn in its recurring revenue portfolio, and had already allocated Dh900m of this on a new school, the expansion of Al Jimi Mall in Al Ain and the acquisition of Daman House in Abu Dhabi’s Capital Centre district.

He also said the company had a current capital expenditure programme of Dh5.2bn, which will be spent on delivering existing projects over the next 24 to 29 months. Current debt levels stand at Dh6bn.

Asjad Yahya, the head of research at Dubai-based Shuaa Capital, said Aldar’s investment portfolio “continues to do well”.

“It looks like they will meet their target of Dh1.6bn of net operating income for this year.”

He said that there was still a lack of consensus over how property markets in the UAE are currently performing.

“But I personally think that we might – dependent on oil staying steady and the US dollar coming down a bit – be coming to the bottom. The fact that we’ve seen good sales from Emaar in Q1 and now from Aldar is positive.”

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