One of Abu Dhabi's largest developers reports a 75 per cent surge in net profits for the first half of the year.
Sorouh profits up 75%
Sorouh Real Estate, one of Abu Dhabi's largest developers, yesterday reported a 75 per cent surge in net profits for the first half of the year. The company said profits grew from Dh556 million (US$154m) in the first half of last year to Dh977m this year. Revenue growth from land sales and rents drove the rise in profits, the company said. "This is another positive financial performance for Sorouh, marking continued progress in our development as one of the leading real estate developers in the region," said Abubaker Seddiq al Khouri, the managing director at Sorouh.
The cornerstone of Sorouh's property portfolio is Reem Island, a development spanning 6.33 million hectares off Abu Dhabi's northeastern coast. The company is building a massive complex of skyscrapers, apartments and parks there estimated to be worth upwards of Dh91.8 billion. Sorouh, a public company with 55 per cent of its equity listed on the Abu Dhabi Securities Exchange, announced recently that it would attempt to raise Dh4bn in a securitised sukuk to help fund its ambitions.
The company said yesterday that the bond would be divided into three tranches with varying seniority - bonds with higher seniority have first claim on assets in case of default - and priced accordingly. The class A tranche worth Dh2.761bn would yield two per cent above the one-month Emirates Interbank Offered Rate (Eibor), Sorouh said. The less-protected class B tranche, worth Dh251m, would yield 2.5 per cent above the one-month Eibor. And the class C tranche, worth Dh1.004bn, would yield 3.5 per cent above one-month Eibor, compensating investors for a lower priority claim on assets in a default.