Abu Dhabi, UAEFriday 24 May 2019

Aldar plans two new developments amid stronger market sentiment

Two more projects in pipeline after success of Alreeman launch, chief executive says

A rendering of Aldar's Alreeman development in Abu Dhabi.
A rendering of Aldar's Alreeman development in Abu Dhabi.

Aldar Properties, the Abu Dhabi real estate developer, plans to unveil two new projects in the first half of this year as it responds to an increase in investor activity fuelled by initiatives such as the emirate’s Dh50 billion stimulus, its chief executive said.

The schemes to be announced include a mix of residential and commercial units and land plots for development by third-party investors on Yas and Saadiyat islands, and elsewhere in the emirate, Talal Al Dhiyebi said yesterday.

“Last year, people were seeing value in the market but were cautious and preferred to wait, whereas now they are seeing opportunities and want to capitalise on them,” he said. “We are working on several projects to suit current demand.”

Aldar expects to finalise research in the next 30 to 60 days to inform design and cost elements, and exactly which products to bring to market. The first development is set to be unveiled at the annual Cityscape exhibition in Abu Dhabi in April, he said.

In particular, Aldar sees strong demand for affordably priced plots of land – a previously untapped segment of the market.

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Last week, the company unveiled its Alreeman project, a 2.8 million square-metre development in Al Shamkha featuring residential and commercial land plots with prices starting at Dh690,000 for villas and Dh4.69m for commercial areas.

On Saturday, Aldar said it secured Dh1.6bn of sales at Alreeman, in a statement to the Abu Dhabi stock exchange, where its shares are traded. Most of the buyers are Arab expatriates or UAE nationals, Mr Al Dhiyebi said.

“There has always been a will to buy land and build on it – it’s a cost-effective way of acquiring real estate – but people never had access to plots at these kind of prices and with flexible payment plans.

“We will certainly be doing more of this.”

The successful launch of Alreeman is a “very encouraging” start to 2019, he said, following a tough few years for UAE real estate in the wake of tumbling oil prices since 2014, which muted economic growth for many regional markets until last year.

Property sales and rental values have declined steadily as cost-conscious residents seek cheaper deals and an influx of new supply keeps prices modest.

However, a pickup in global GDP growth last year, together with specific national initiatives including Abu Dhabi’s Dh50bn fiscal package intended to encourage investment in the emirate, is starting to raise positive business sentiment.

Mr Al Dhiyebi said there remain “pockets of very strong demand” despite price corrections in many areas of Abu Dhabi last year, and that Aldar “will continue to serve all segments of the market”.

Within its commercial portfolio, Aldar is recording high occupancy rates of around

90 per cent and tenants have begun requesting larger floor plans, indicating a rise in corporate hiring activity, he said.

In addition, state-owned oil giant Abu Dhabi National Oil Company has announced a string of deals and expansion plans over the past six months, which could further boost the emirate’s property market.

Around 50 to 60 per cent of Aldar’s proposed new residential supply falls in the affordable category, while around 30 per cent will be in the premium (mid-to-upper) segment, and 5 per cent is luxury product, mainly on Saadiyat Island.

There are no plans to raise further financing in the first half of this year, following the issuance of Aldar’s $500m sukuk in September and an extension of its existing debt facilities, Mr Al Dhiyebi added.

“We are very well financed for our new projects,” he said.

Updated: January 21, 2019 07:30 AM

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