Aldar reports a 150 per cent rise in net profit on back of Abu Dhabi Government support
Profits soar at UAE's flagship developers
The UAE's two biggest property developers yesterday posted rosy profits for the first quarter, spelling good news for an industry still affected by the financial downturn.
The Abu Dhabi firm Aldar Properties said profits more than doubled in the first three months of the year compared with a year earlier, while Dubai's Emaar Properties - which built the Burj Khalifa, the world's tallest tower - reported a 44 per cent increase.
Commentators said the profits rebound spelled positive news for the UAE property market as a whole.
"It's good news that the major developers in both markets are improving their financial results," said Craig Plumb, the head of research at Jones Lang LaSalle in the Middle East and North Africa
Aldar's profits soared in the first quarter, as government support worth almost US$10 billion (Dh36.73bn) continued to prop up the developer.
The Abu Dhabi property firm was buoyed by the delivery of units at its Al Raha Beach development, as well as the transfer of plots of land to the Abu Dhabi Government.
Aldar said work was continuing on developments such as Yas Mall - a 235,000 square metre retail development that is set to be Abu Dhabi's largest mall on its completion towards the end of next year.
The Yas Waterworld Abu Dhabi entertainment park, situated next to Ferrari World Abu Dhabi, is set to be delivered in the fourth quarter of this year, Aldar said.
The Abu Dhabi company reported a net profit of Dh478.2m in the first three months of this year, a 153 per cent increase on the same period last year, when it made Dh189.1m.
Its revenues stood at Dh3.589bn for the quarter, up from Dh784.7m during the same period last year.
Aldar realised about Dh2.2bn from sales contracts with the Abu Dhabi Government and related entities, the company said.
That followed a government assistance programme worth about Dh36bn last year, as Aldar, along with many other developers, was hit hard by the downturn.
Aldar said yesterday it had handed over to the government several plots of land at the Al Raha Beach development under an agreement signed last year.
"Further unit handovers as part of the Government sales agreements signed in 2011 are expected to take place over the course of 2012," the company said.
Aldar said it had handed over a total of 606 residential units at the Al Raha Beach development, including some to third parties.
In December, Aldar said it had sold some of its prized assets, including Central Market and hundreds of homes on Al Raha Beach, to the Abu Dhabi Government for Dh16.8bn.
Last month, it emerged that Aldar and Sorouh Real Estate, another Abu Dhabi developer part-owned by the Government, were weighing a $15bn merger.
"The Abu Dhabi Government is taking measures to stabilise and consolidate the real estate market," Mr Plumb said.
Emaar Properties, meanwhile, said on Saturday that its first-quarter profit rose by 44 per cent, due to increased sales of properties in Dubai and revenues from its malls and hotels divisions.
Net income climbed to Dh606m from Dh421m a year earlier. That was ahead of a profit estimate of Dh566m based on four analysts' forecasts, according to data compiled by Bloomberg News.
Mr Plumb said Emaar's retail and hotels operators had been particularly successful. "They've delivered product to the market and concentrated their efforts to the retail and hotel markets, which have performed the best," he said.
Mr Plumb said Dubai's property market was very different to that in Abu Dhabi but was also recovering.
"The Dubai market is generally improving, at least for the better-quality product. And Emaar is well represented in that area."