Abu Dhabi’s Aldar Properties posts 22% jump in Q1 2023 profit

Abu Dhabi’s Aldar Properties posted a 22 per cent increase in Q1 2023 net profit to $228m (Dhs836m), driven by robust demand from both international and resident expat buyers, with record quarterly development sales of Dhs4.5bn.

The property developer’s revenues surged by 14 per cent to Dhs3.1bn in Q1 2023, compared to Dhs2.7bn during the same period a year earlier. Aldar said its revenue backlog hit a record Dhs18.8bn which provides visibility over the next two to three years.

Aldar Development achieved property sales rose by 105 per cent to Dhs4.5bn, the property firm’s highest-ever quarterly sales while its revenues increased by 8 per cent year-on-year (YoY) to Dhs1.9bn. Egypt’s SODIC contributed Dhs177m to the company’s Q1 2023 revenue with earnings before interest, taxes, depreciation and amortisation (EBITDA) standing at Dhs3m.

The property firm’s investment unit, Aldar Investment, reported revenues of Dhs1.2bn in the first three months of the year, up 45 per cent compared to the same period last year. The unit said its EBITDA reached Dhs536m, up 43 per cent during the same period in 2022.

Aldar posts 22% increase in Q1 2023 net profit driven by record quarterly development sales of AED 4.5 billion and strong contributions from recurring income portfolio pic.twitter.com/6FysuL0MsS

— ALDAR (@AldarTweets) May 3, 2023

The performance of Aldar Investment, which has Dhs32bn assets under management, was attributed to higher occupancy rates, strong rental rates and contributions from new acquisitions across the portfolio.

The property firm reported solid performance across its diversified investment portfolio driven by a buoyant rental market and rising occupancy across the portfolio, with recent acquisitions performing above expectations.

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Talal Al Dhiyebi, group CEO of Aldar Properties said, “Aldar has maintained positive momentum in the first quarter of 2023, reporting a strong set of results against the backdrop of positive economic fundamentals in the UAE.”

The Abu Dhabi-based developer’s hospitality and leisure business posted an EBITDA of Dhs116m, a 417 per cent YoY increase, thanks to the positive contributions from new acquisitions as well as higher occupancy and average daily rates (ADR). Occupancy across the portfolio stood at 74 per cent in the first quarter of the year, up from 69 per cent in the same period in 2022. Similarly, ADR increased to Dhs596 across the portfolio, up 65 per cent compared to the same period last year.

Aldar Properties’ growth strategy

Meanwhile, the Abu Dhabi-based property developer has been investing extensively across the Middle East’s crowded property market amid a spectacular recovery in the real estate sector. Aldar said its expansion plans include the acquisition of Al Fahid Island, which is expected to add waterfront offering to its development pipeline.

The property firm announced in February that it plans to start work on projects in Dubai this year after the property giant expanded into the Middle East’s business hub through a joint venture with Dubai Holding.

“Aldar’s investment platform continued to grow at pace driven by tenant occupancy of 93 per cent across assets, strong rental returns, and positive contributions from new acquisitions within the portfolio, particularly the four office towers at ADGM,” said Al Dhiyebi.

The company jointly acquired a Grade A commercial office located on Al Maryah Island in Abu Dhabi for Dhs450m with state investor Mubadala last December. It also bought a beach resort property in Ras Al Khaimah for Dhs770m in April 2022.

Beyond the UAE, Aldar has gained a foothold in Egypt by acquiring a majority stake in a developer known as SODIC and is also reportedly considering buying a majority stake in Egyptian developer Medinet Nasr Housing. In August 2022, investment funds managed by Apollo Global Management acquired a minority stake in Aldar’s subsidiary Aldar Investment Properties in a deal valued at $400m.

Moody’s reaffirmed Aldar Properties’ and Aldar Investment Properties’ Baa2 and Baa1 ratings, respectively, in recognition of the developer’s sizeable development landbank, diversified recurring income portfolio and strong liquidity position.

Read: Aldar Properties, Mubadala to jointly develop commercial tower on Al Maryah Island