Aldar on track to reach Dh4bn in off-plan sales this year

Abu Dhabi’s Aldar Properties is on track to achieve Dh4 billion in off-plan sales and generate Dh1.7bn in net operating income from its asset management business this year, said the company as it reported a rise in third-quarter revenues.

Year-to-date off-plan sales climbed to Dh3bn and “we feel very confident that [the sales target] will be fulfilled. So we are not changing that [guidance] through the fourth quarter,” said Greg Fewer, chief financial officer of Aldar.

“Both those guidances represent significant growth on where we finished our business in 2018, so 2019 as a growth year is very much on track,” Mr Fewer said yesterday. “The fact that these guidances remain stable reflects the confidence we are seeing in the market.”

Aldar more than quadrupled off-plan sales at the end of the third quarter and more than doubled them in the first nine months of the year. The majority of of the sales were to new customers, Mr Fewer said.

“The positive investor sentiment is created by a lot of regulatory change by the government, whether it is the real estate law perfected and rolled out … as well as visa programmes. These are all improving sentiment,” he added.

Aldar Properties, the biggest-listed developer in the emirate, reported a 7 per cent rise in its third-quarter revenues to 1.6bn, with quarterly off-plan development sales reaching Dh1.1bn.

Net operating income for Aldar’s asset management business increased by 4 per cent to Dh397 million. Overall gross profit of the company rose by 14 per cent year-on-year to Dh662m.

“Aldar’s customer-centric business model continues to deliver sustainable, broadbased growth. Development sales have seen strong momentum this year following the successful launch of new projects,” said Talal Al Dhiyebi, chief executive of Aldar.

“Robust demand from end users for our off-plan developments and infrastructure-enabled land plots is a positive sign for the Abu Dhabi real estate market and the wider economy.”

The company’s large portfolio of rental properties owned and managed by Aldar Investments is also producing “predictable income streams that provide the strong base for our dividend”, Mr Al Dhiyebi said.

However, Aldar’s quarterly net income fell by 8 per cent to Dh387m at the end of September owing to higher non-recurring income in 2018, primarily from government reimbursement payments for completed infrastructure delivered by the company.

“In the corresponding period of 2018, we were recording still a lot of other income from our programme of infrastructure handing over,” Mr Fewer said. “This has been a long-standing programme, and that has wound down last year. Net income line reflects the non-recurrence. [However] from a core business perspective, it is still very much a growth story.”

Revenue for the first nine months of the year also rose 12 per cent to Dh5.03bn, while the company’s gross profit increased 6 per cent to Dh2.05bn.

“Aldar’s flagship projects such as Mamsha, Jawaher and Yas Acres are progressing well with handover dates approaching,” Egyptian investment bank EFG Hermes said in a note to investors. Aldar’s development sales revenue backlog stood at Dh4.6bn as at September, up from Dh4.5bn in June 19, it added.