x Abu Dhabi, UAEThursday 27 July 2017

Aldar sheds jobs as part of strategy adjustment

Aldar has laid off almost 25 per cent of its staff across all areas as part of a corporate restructuring.

Aldar Properties, Abu Dhabi's largest property developer, has cut almost a quarter of its staff as part of a major corporate restructuring. Sammy Dallal / The National
Aldar Properties, Abu Dhabi's largest property developer, has cut almost a quarter of its staff as part of a major corporate restructuring. Sammy Dallal / The National

Aldar Properties, Abu Dhabi's largest property developer, has cut almost a quarter of its staff as part of a major corporate restructuring.

Due to a "less intensive development schedule", the workforce has been reduced by 105 people, the company said. The redundancies came in all areas of Aldar.

The company behind the development of Ferrari World and Raha Beach expects to focus more on property management and asset management as it adjusts its business in the wake of the property downturn.

A number of new jobs have been created and some functions have been expanded as part of the restructuring, the company said.

"The main objective of this new strategic direction is to return Aldar to long-term growth and ensure ongoing value creation for all our stakeholders," said Ali Eid Al Mheiri, the chairman of Aldar Properties.

The company will target projects where there is "demonstrable demand", including construction of national housing projects, he said.

Aldar is paid a set fee to build Emirati housing developments such as Al Falah, a 4,800-unit project under construction near the Abu Dhabi International Airport. The Abu Dhabi Government plans to build 13,000 homes for Emiratis in the next four years.

The company will also focus on increasing the "value of existing development projects and investment properties", it said.

A company spokesman declined to comment on the specifics of the new strategic plan, saying only that details would be released in the next few weeks.

The job cuts were not a surprise as Aldar "realigns and focuses on streamlining costs", said Mohammad Kamal, an analyst with Arqaam Capital. Aldar is carrying Dh14.8 billion (US$4.02bn) in debt maturing in the next fiscal year, Arqaam estimates.

"Overall we see Aldar as a business that is being run with the objective of meeting its debt obligations as a priority over growth," Mr Kamal said.

Aldar announced in January a funding plan under which the Abu Dhabi Government would buy Dh10.9bn of the company's infrastructure assets on Yas Island, Dh5.5bn of residential units and land, and issue a Dh2.8bn convertible bond.

The bond was purchased by Mubadala Development, a strategic investment company owned by the Abu Dhabi Government.

"Aldar is already recognised as a master developer and we aim to build on that … while strengthening our development management and asset management capabilities," Mr Al Mheiri said.

kbrass@thenational.ae