Aldar records Dh7.2b property sales in 2021

Abu Dhabi real estate giants posts 21% growth in net profits last year, highlighting the resilience of its diversified business model



The property group also reported two per cent year-on-year growth in revenues at Dh8.58 billion. — File photo
The property group also reported two per cent year-on-year growth in revenues at Dh8.58 billion. — File photo
by

Muzaffar Rizvi

Published: Wed 9 Feb 2022, 2:49 PM

Aldar Properties on Wednesday announced strong financial results for 2021 and attributed the credit to its diversified business model.

In a statement, the Abu Dhabi-listed real estate giant said it recorded double-digit growth of 21 per cent in net profit which rose to Dh2.33 billion last year despite a challenging business environment across the globe. In addition to 21 per cent surge in its gross profit at Dh3.6 billion, the property group also reported two per cent year-on-year growth in revenues at Dh8.58 billion.

Mohamed Al Mubarak, chairman of Aldar Properties, said Aldar’s robust performance in 2021 represents a resilient business that is diversifying and transforming at pace, and highlights Abu Dhabi’s appeal as a premier global investment destination.

“Confidence in the emirate’s real estate market continues to strengthen as a result of the successful economic and social reforms implemented by the Abu Dhabi government and was demonstrated by the sell-out launches that delivered Aldar’s highest-ever annual development sales,” he said.

“With Aldar’s new operating model introduced during 2021, our future growth will be underpinned by geographic and business diversification, strategic investments, and acquisitions in core sectors. Our focus on sustainability, digital transformation, and talent will ensure continued growth and delivery of increased shareholder value,” Al Mubarak added.

Growth drivers

Aldar, which reported earnings per share of Dh0.295, up 20 per cent year-on-year basis, demonstrated a sustainable growth of shareholder value. It attributed Aldar’s robust financial to the strong performance of the Aldar Development business and growth in Aldar Investment’s recurring income portfolio.

Aldar Development also reported its highest-ever revenue backlog of Dh5.9 billion, supporting visibility and predictability of future revenue, along with the steady ramp-up of the fee-based business with projects backlog of Dh41.1 billion.

Moreover, Aldar Investment’s resilient performance was driven by strong rental rates and leasing activity across the portfolio, which ended the year at 93 per cent occupancy. This was primarily driven by Yas Mall, Abu Dhabi’s dominant super regional mall, which is benefitting from a successful redevelopment and repositioning plan, ending the year at 97 per cent occupancy.

Talal Al Dhiyebi, group chief executive officer of Aldar Properties, said the company’s strong financial results demonstrate the resilience of its diversified business model. — Supplied photo
Talal Al Dhiyebi, group chief executive officer of Aldar Properties, said the company’s strong financial results demonstrate the resilience of its diversified business model. — Supplied photo

Futureproofing business model

Talal Al Dhiyebi, group chief executive officer of Aldar Properties, said the company’s strong financial results demonstrate the resilience of its diversified business model.

“With the economic rebound gathering momentum throughout 2021, Aldar not only delivered an excellent set of financial results, but also invested in diversifying and futureproofing our business with strategic acquisitions, a strengthened development pipeline, and a first international market entry,” he said.

“Our development business’ annual sales record and strong revenue backlog coupled with the robust occupancy performance and leasing growth across Aldar Investment’s portfolio demonstrates the resilience of our diversified business and strong execution capabilities,” Al Dhiyebi added.

He said the solid performance and corporate initiatives executed throughout 2021 have enabled “us to carry forward our strong momentum” into 2022.

“Already, we have completed an initial entry to Ras Al Khaimah, a substantial investment in our education business, and introduced a range of new sustainability initiatives that are positive for our business and the environment.

“Looking ahead, we are ready to finalise landmark transactions, deploy capital efficiently in new opportunities, and execute on our transformational growth strategy across geographies, businesses and sectors,” he said.

Aldar sales were supported by a broadening customer profile, with an increasing number of younger and female buyers purchasing properties in Abu Dhabi. — File photo
Aldar sales were supported by a broadening customer profile, with an increasing number of younger and female buyers purchasing properties in Abu Dhabi. — File photo

Aldar Development

Aldar Development, Abu Dhabi’s leading property development company, reported sales of Dh1.1 billion in the fourth quarter, bringing the full year total sales to a record figure of Dh7.2 billion. Major project launches including multiple phases of Noya and Yas Acres, Al Gurm and the third phase of Saadiyat Reserve were the primary drivers behind this highest-ever sales figure.

Sales were supported by a broadening customer profile, with an increasing number of younger and female buyers purchasing properties in Abu Dhabi. The overseas and resident expat customer segment showed strong demand throughout the year, representing 44 per cent of Aldar’s sales, up 32 per cent from the previous year. Yas Island remains a key priority, with developments on the island accounting for 62 per cent of the total value of sales throughout 2021.

Aldar Project’s fee-based business delivered strong results, with a continued ramp-up throughout the year. A total of Dh6.9 billion in capex was spent in 2021, resulting in a remaining backlog of projects worth Dh41.1 billion.

The last quarter of 2021 also saw an Aldar-led consortium acquire an 85.52 per cent stake in one of Egypt’s leading listed real estate development companies, Sixth of October Development and Investment Company (SODIC). This acquisition is part of Aldar’s overall expansion strategy into the Egyptian real estate market. The consortium will now pursue its objective to advance SODIC’s position as a leading national developer by scale and reputation, growing its portfolio of mixed-use residential communities in Greater Cairo, the North Coast and other major markets.

Aldar Investment

Aldar Investment, the largest diversified real estate asset management platform in the region, continued to demonstrate the resilience and defensiveness of its portfolio in 2021.

Yas Mall achieved 97 per cent occupancy at the end of December, up 17 per cent from a year earlier, highlighting successful leasing and the introduction of new and unique concepts and offerings as part of the successful mall repositioning.

In addition, the community retail assets occupancy saw an increase of 17 per cent from last year to 95 per cent, mainly due to the ramp up in Mamsha retail. The retail segment’s weighted average unexpired lease terms (WAULT) increased by 38 per cent, demonstrating the long-term leases secured during the year.

The commercial portfolio registered solid performance with strong leasing growth, ending the year at 93 per cent occupancy. This was mainly driven by strong leasing in both International Towers and Aldar’s flagship HQ building. The residential portfolio like for like occupancy was up five per cent year-on-year basis to 93 per cent as tenants continue to choose Aldar as the developer of choice.

Aldar Education’s performance was solid in 2021 following an increase in enrolments reaching over 26,000 in total, the highest since its inception. — File photo
Aldar Education’s performance was solid in 2021 following an increase in enrolments reaching over 26,000 in total, the highest since its inception. — File photo

Hospitality, leisure business

The hospitality and leisure business continues to recover with strong fourth-quarter demand, driven by excellent performance during the Formula One event and the holiday season.

Aldar Education’s performance was solid in 2021 following an increase in enrolments reaching over 26,000 in total, the highest since its inception. In first quarter of 2022, the education business also committed to over Dh1 billion in investments to diversify its portfolio of schools and increase the number of students to more than 40,000 by the 2024-25 academic year.

Within the Principal Investments business, Aldar’s property management company Provis witnessed a significant increase in new contracts. Currently, Provis includes a portfolio of 55,000 residential units, 490,000 Gross Leasable Area (GLA) of retail assets, and 318,000sqm of commercial assets under management.

Corporate updates

Multiple ESG, digital transformation, and talent development initiatives were successfully delivered in 2021, with these areas remaining a core focus for Aldar.

Aldar’s ESG focus saw the company secure the region’s first sustainability-linked loan, with the Dh300 million five-year facility linked to the company’s sustainability performance. Aldar also joined the United Nations Global Compact, adopted the Task Force on Climate Related Financial Disclosures framework, and achieved the highest ESG rating amongst publicly listed real estate developers in the UAE.

ESG progress has carried into the opening months of 2022, with an agreement signed with Emirates Water and Electricity Company (EWEC) to adopt clean energy across all of Aldar’s owned and managed operating assets. The company has also launched a portfolio-wide energy management project to reduce its energy consumption by approximately 20 Hospitality and Leisure business across 80 assets including hotels, schools, commercial, leisure, retail, and residential buildings.

As part of its digital transformation strategy, Aldar launched the second cycle of its Scale Up programme, which is one of the UAE’s first programmes to attract international start-ups with technologies that have the potential to shape the open metaverse. The company also signed an agreement with Majid Al Futtaim to collaborate on the digitalisation of real estate transactions to make property purchases, sales, and management a simple and convenient process for both UAE-based and overseas customers.

Boosting its efforts to develop the next generation of talent in Abu Dhabi, Aldar committed to hiring and training 1,000 UAE nationals by 2026. The company was also named as a top 10 employer for the working environment it has created for women by ‘Great Place to Work’.

Financial performance at a glance

Net profit increase of 21 per cent year-on-year basis, reaching Dh2.33 billion, supported by strong performance across the group businesses

Record sales of Dh7.2 billion supported by successful new project launches across varied price points (sales up 100 per cent year-on-year basis)

Significant ramp-up of development fee-based business (total project back log of Dh41.1 billion), with over Dh6.9 billion of capex deployed in 2021

Strong balance sheet and undrawn facilities with liquidity of Dh9 billion providing significant dry powder for growth


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