Aldar bullish as government policies lift real estate market
Aldar Properties, the biggest listed developer in Abu Dhabi is bullish in terms of the market outlook next year as a result of new government measures that will boost the property sector, a top company official said.
The introduction of a freehold law as well as proposed plans by the UAE Central Bank to ease rules regarding the cap on lending to the sector will boost the investment climate for real estate, he argued, as would the new personal insolvency law.
Although the latter does not decriminalise bounced cheques, it does mean investors who can no longer afford to make payments can seek a court-approved payment plan to restructure debts which will place any criminal cases against them on hold.
“Freehold law is definitely boosting sentiment in the real estate sector ... and will help the confidence with our real estate customers who come to invest,” Maan Al Awlaqi, executive director of commercial at Aldar Properties told The National at a Cityscape event in Abu Dhabi.
The UAE Central Bank currently allows banks to lend as much as 20 per cent of their total deposits to the property sector with the cap being raised to a still undecided level, Mubarak Rashid Al Mansouri, the regulator’s governor recently said. Under proposed changes, lenders would be allowed to exceed the 20 per cent cap, but they would incur a capital charge.
“Obviously, liquidity coming from banks, the more there is, the more it helps. Liquidity is key for any segment of the economy. It is an incredible positive driver,” Mr Al Awlaqi said.
When asked whether Aldar Properties is going to start new projects this year or in the coming months, he said” “we have all segments designed, shelfready as and when we think we should launch a project, we do so within a very quick turnaround”.
The company is already providing plenty of supply to the market with new projects, he said. “We launched Dh5 billion mega-projects this year with Reeman, Lea. The fact that they are selling out shows that we are measuring supply properly and providing supply where the pent-up demand is,” Mr Al Awlaqi said.
Plot sales at Saadiyat Island, which the company launched this year, are going well with interest from Emiratis and other Arab investors, he said.
“A lot of UAE nationals, a lot of Arab expats, are seeing it as an investment vehicle, where they buy a plot and build villas on them and ... rent them out,” he said, without specifying the number of plots soldr.
The project, named Saadiyat Reserve, has 306 infrastructure-enabled land plots available for sale to all nationalities. The project’s launch follows three earlier successful land plot sales, at Alreeman, Alreeman II and Lea, which generated sales of Dh2.4bn for the company.
Aldar reported a 7 per cent rise in its third-quarter revenues to 1.6bn, with quarterly off-plan development sales reaching Dh1.1bn. The company is on track to achieve Dh4bn in off-plan sales and generate Dh1.7bn in net operating income from its asset management business this year.
“We’ve done growth this year,” Mr Al Awlaqi said, adding “and we will keep growing”.