Dubai: Net profit for Aldar Properties dipped to Dh2 billion from Dh2.8 billion a year ago, which according to the Abu Dhabi based master-developer was caused by a one-off revaluation of its assets under management. Even then, the revaluation charge — at Dh495 million — is “less than 3 per cent” of the entire portfolio, top official said.
It was the fourth-quarter net profit of Dh141 million — against Dh727 million in the fourth quarter of 2016 — that hemmed in the overall 2017 net.
On other counts, Aldar’s numbers look robust, with the “underlying” gross profit for the year at Dh2.7 billion, a gain of 34 per cent. The underlying revenues were up 26 per cent to Dh6.2 billion. (Underlying profits and revenues represent income generated from purely operational activities during a particular period under review. The 2016 net profit, for instance, included income of Dh654 million from a land transaction.) Aldar has proposed 12 fils a share as dividend, against the 11 fils in 2016. The developer also managed to retain a grip on costs, at Dh3.52 billion against 2016’s Dh3.59 billion.) Property sales were at Dh3.5 billion and ahead of expectations. And it was the fourth quarter that brought in Dh1.2 billion, driven by demand for the Water’s Edge and West Yas.
It would be a theme that Aldar will look to repeat this year as well, according to its CEO, Talal Al Dhiyebi. This will see Aldar continue to launch mid-market residential projects — “that addresses a wider spectrum of buyers than was the case before” — in “new destinations” within Abu Dhabi. In 2017, it managed a quick sell-out on two such launches, The Bridges and Water’s Edge. (In all, it sold 1,900 homes last year across all its projects.) “The new destinations will create even more pockets within Abu Dhabi for people to relocate,” said Al Dhiyebi. “These are areas that are currently underserved.
“Our accomplishments during 2017 validate the success of our destination development strategy.”
Commercial assets
The developer currently has a sold status for 83 per cent of its residential portfolio. On the asset management side, occupancy levels across its residential and retail holdings averaged 90 per cent plus last year. Commercial assets came in just under the 90 per cent mark. The hospitality side had 77 per cent occupancy, which remains above the Abu Dhabi average.
These managed asset portfolio of Dh18 billion secured a net operating income of Dh1.6 billion and “in line with FY2016”. This was boosted by higher occupancy at the hotels during the fourth quarter, while Aldar also completed the Dh658 million purchase of the International Tower, located at the Capital Gate district in Abu Dhabi.
Its under construction portfolio now extends to 7,000 homes, three-fourths of which are on Yas Island. The first residents are also moving into the flagship destination, until now known more for its mall and Ferrari World.
“The capital expenditure for the next 24 months would be Dh5.4 billion against Dh2.6 billion in 2017,” said Greg Fewer, Chief Financial Officer.
It would be interesting to see where Aldar pitches its next mid-market residences. For now, it has the off-plan field all to itself with other Abu Dhabi based developers likely to take an extremely cautious approach on new off-plan releases, market sources suggest. And the chances they would offer something in the mid-market price range is even more remote, they add.
“From a financial perspective, we have the flexibility to chase new opportunities in the market,” Fewer said. “The balance sheet remains strong there will be a definite focus on the mid-market.”
Factbox: Going full steam ahead on the project side
Aldar, which awarded Dh3 billion worth of construction contracts last year, had two off-plan launches — The Bridges and Water’s Edge. Nearly all of the units sold out in weeks following their launches in April and September. In all, Aldar recorded Dh3.5 billion in sales across 1,900 units from its entire portfolio.
On the handover side, its Yas Island communities will start seeing more residents moving in. The handover of Ansam began in December 2017, and marked the launch of Yas Island’s permanent residential population. Al Hadeel, located on Al Bandar, also started handover in December. Nareel Island, West Yas and Al Merief are entering final stages of construction and are on track to be handed over during the first-half of this year.
— M.N.
