x Abu Dhabi, UAEWednesday 17 January 2018

TDIC to raise $1bn with bonds

The Tourism Development and Investment Company is planning to raise another $1 billion under its $5bn bond programme as it ramps up construction on Saadiyat Island.

The Abu Dhabi Tourism Development and Investment Company (TDIC) is planning to raise another US$1 billion (Dh3.67bn) under an existing bond programme in the next year as it increases construction activity on Saadiyat Island.

The money is expected to be used to fund TDIC projects, which include additions to its destination hotels such as the Qasr al Sarab in the Empty Quarter.

In 2009, TDIC launched a facility that comprised $3bn of medium-term notes and a $1.45bn Islamic bond. The company issued $2bn of debt under that facility. A new issuance would be the first debt-raising for TDIC in about two years.

James Pringle, who became acting chief executive of TDIC in January, said the company was looking to begin raising this debt somewhere between July this year and the end of March next year. "We're looking for longer-term debt," he said. The company plans to issue debt with maturities of between seven and 10 years.

Martin Kohlhase, an analyst at Moody's Investors Service, said the move toward longer-term debt would match the company's pipeline of projects over the coming decades.

TDIC was also in negotiations with international developers from London, Singapore and Paris about plots of land in its Cultural District on Saadiyat Island.

The area is where the Louvre Abu Dhabi, Guggenheim Abu Dhabi and Zayed National Museum are under construction.

"The talks we had started in 2008 and 2009 have gone somewhat quiet," Mr Pringle said. "Now there are new talks, with companies in Europe and Asia, that are progressing well."

The companies were interested in developing properties in close proximity to the three museums. When complete, the result will be a place that is "unique on planet Earth", Mr Pringle said.

"Interest has gone up about 100 per cent in the last month," he said. "People realise Abu Dhabi is a commercial hub in the GCC. On the island, there are going to be a lot of opportunities for new projects."

TDIC yesterday debuted the show homes for its Saadiyat Beach Villas development, which is due to begin being handed over by the end of this year, Mr Pringle said. About two thirds of the homes, which range from Dh6.5 million to Dh40m in price, have been sold, although most of those sales took place in 2008 when they were first announced. The company did not make clear how many buyers were still making payments.

A major marketing effort is now beginning in a bid to sell the remaining homes, as the island nears a milestone in having its first residents and guests. Two hotels - the St Regis Saadiyat Island Resort and Park Hyatt Abu Dhabi - should be finished by the end of this year.