Aldar Properties’ first-quarter net profit jumps 23% on record sales and expansion of developer’s business

Aldar Properties, Abu Dhabi’s biggest listed developer, reported a 23 per cent jump in its first-quarter profit as revenue climbed on the back of record property sales and the expansion of its business amid the continued recovery of the UAE’s real estate market.

Net profit attributable to equity holders of the parent company for the three months to the end of March climbed to Dh668 million ($182m), the company said in a filing to the Abu Dhabi Securities Exchange, where its shares are traded.

Revenue increased by 31.5 per cent to Dh2.68 billion.

Group development sales for the reporting period doubled to a record Dh2.2bn, driven by the inclusion of Egypt’s Sixth of October for Development and Investment Company’s (Sodic) strong first-quarter sales and continued momentum in Abu Dhabi’s property market.

Last year, a consortium of Aldar and ADQ, one of the region’s biggest holding companies, acquired a majority stake in Sodic for 6.1bn Egyptian pounds ($386.8m).

“During the first quarter, Aldar not only delivered a strong financial performance but we also diversified our sources of funding and scaled up our operational capabilities in preparation for further growth opportunities,” said group chief executive Talal Al Dhiyebi.

“We attracted a major investment from Apollo Global Management, which is driving the accelerated expansion and diversification of our investment property business. We also entered the high-potential market of Ras Al Khaimah through two acquisitions in retail and hospitality, further increasing our geographic footprint, having entered the Egypt market at the end of last year.”

Apollo Global Management, one of the world’s largest alternative investment managers, agreed to invest $1.4bn through Apollo-managed funds and clients in Aldar Properties.

This is expected to help the company to unlock value and represents one of the largest foreign direct investments in Abu Dhabi’s private sector.

The investment allocates $500m to a land joint venture, $500m to perpetual subordinated notes issued by Aldar Investment Properties, $300m to mandatory convertible preferred equity investment in Aldar Investment Properties and $100m to common equity investment in Aldar Investment Properties.

Aldar also bought two properties in Ras Al Khaimah this year – Rixos Bab Al Bahr hotel for Dh770m and Al Hamra Mall for $111.6m – to expand its portfolio further.

“In the coming months, Aldar will capitalise on a robust deal pipeline to further broaden our asset base. With demand for quality Abu Dhabi property remaining strong among investors and end users, we will also ramp up development activity and new project launches, particularly on the expanded strategic land bank on Saadiyat Island,” Mr Al Dhiyebi said.

The property market in the UAE, the second-biggest Arab economy, has made a strong recovery from the coronavirus-induced slowdown amid several business and social reforms and government-stimulus measures. Residential property prices in Abu Dhabi increased by 1.5 per cent in the 12 months to March as the wider UAE market made a strong start to the year, a report by property consultancy CBRE said.

Average apartment prices increased by 1.6 per cent to Dh10,904 ($2,969) per square metre in the year to March, while average villa prices rose 1.1 per cent to Dh8,850 per square metre.

Abu Dhabi registered real estate transactions worth Dh71.5bn last year, according to the Department of Municipalities and Transport.

Yas Island topped the list of best-performing areas, registering Dh4.1bn in deals, followed by Reem Island (Dh3.2bn) and Saadiyat Island (Dh2.5bn).

Aldar’s UAE sales rose by 39 per cent annually to Dh1.5bn, which is the seventh consecutive quarter in which the company has exceeded Dh1bn in residential sales in the Emirates as more overseas customers and residents purchased property.

Sodic recorded its highest first-quarter sales figure of Dh678m, up 102 per cent, with projects in West Cairo, including the newly launched “The Estates Residences”, accounting for 36 per cent of sales, Aldar said.