Aldar Properties to Invest $1.36 billion in New Recurring Income Assets

In the heart of Abu Dhabi's dynamic real estate landscape, Aldar Properties, the emirate's most prominent developer, has emerged as a beacon of unprecedented success. As we delve into the projects and financial milestones, it becomes evident that Aldar is not only riding the wave of a resurgent property market in the UAE but also strategically shaping the future.

From significant developments in commercial real estate on Yas Island, Saadiyat Island, and Al Maryah Island to the company's ventures into international markets, we explore the driving forces behind Aldar's remarkable growth. Here’s the story of Aldar Properties' trailblazing journey in 2023, paving the way for a more successful future.

Strategic Investment in Income-Generating Assets

Aldar Properties is set to invest AED 5 billion ($1.36 billion) in developing various income-generating assets in Abu Dhabi. The focus will be on the commercial, retail, and hospitality sectors, aligning with the UAE's escalating demand for real estate.

The new assets, scheduled for phased delivery between 2025 and 2027, will contribute to Aldar's expanding recurring income portfolio. The developer, already investing in logistics assets, will now invest in commercial developments.

Talal Al Dhiyebi, the Chief Executive of Aldar Properties, shared the information at the Abu Dhabi Securities Exchange, where the company's shares are listed.

Aldar is driving rapid expansion of its high-value asset portfolio through a disciplined acquisition and develop-and-hold approach, to significantly increase recurring-income streams and long-term capital appreciation,

Key Developments in Commercial Real Estate

As a component of its investment strategy, Aldar Properties is set to embark on the development of commercial assets across Yas Island, Saadiyat Island, and Al Maryah Island. This initiative encompasses the construction of a 12-storey office tower adjacent to the Yas Plaza Hotels on Yas Island, offering 25,000 square meters of new leasable space, inclusive of retail areas. This Aldar Yas Island project is slated for completion and handover in 2025.

On Saadiyat Island, Aldar has unveiled plans to create a business park spanning approximately 26,000 square meters of Net Leasable Area (NLA) at Saadiyat Grove. Positioned as an integrated mixed-use development in Abu Dhabi’s Cultural District, this project will feature four Grade A commercial office buildings.

Similarly, in the financial hub of Abu Dhabi, located on Al Maryah Island, Aldar will extend its collaboration with Mubadala. The company intends to introduce a second Grade A commercial tower adjoining the site of the previously announced 37-storey office building in 2023. This strategic move aims to amplify the availability of office space within The Abu Dhabi Global Market, with the completion targeted for 2027.

Aldar, the developer behind Abu Dhabi's Formula One circuit and other developments in the emirate, is also boosting its retail portfolio. The company is developing 78,000 square metres of NLA at Saadiyat Grove, including a central shopping destination, two retail boulevards, and community retail spaces. It will also develop retail assets in Saadiyat Lagoons, Noya, and Yas Golf Collection.

In the hospitality segment, the company will develop and manage the 127-room Nobu-branded hotel on Saadiyat Island, which is set to be completed in the second quarter of 2027.

Positive Trends in the Commercial Market

The growth within the financial district comes in the wake of Aldar's procurement of the four ADGM towers and Al Maryah Tower in 2022, with deals amounting to $1.17 billion and $122.5 million, respectively.

With commercial developments in the capital city, Aldar anticipates a substantial 31% increase in its commercial Net Leasable Area (NLA) to reach 549,000 square meters.

Currently, the occupancy rate across Aldar's commercial property portfolio is robust at 95%, with the four ADGM towers achieving an even higher occupancy rate of 96% as of the end of 2023.

Record-Breaking Financial Performance in Q4 2023

Aldar Properties has reported a whopping 39% jump in net income, reaching AED 1.4 billion ($381.47 million) by the fourth quarter of 2023. The Abu Dhabi developer also announced the highest-ever quarterly development sales of AED 8.5 billion, contributing to a full-year record of AED 27.9 billion. 

Aldar anticipates a sustained demand for real estate in Abu Dhabi, projecting that the emirate will primarily contribute to the company's overall sales. During the last quarter of the year 2023, Abu Dhabi witnessed a 39.4% increase in off-plan sales transactions, totaling 2,238, compared to the same period in the previous year.

Additionally, the sales volume of ready homes saw a rise of 36.5%, reaching 740, as reported by ValuStrat. After generating AED 3.1 billion in sales from the initial two phases of its Dubai residential project last year, Aldar Properties Dubai aims to initiate new projects in Dubai and other emirates. These impressive financial figures reflect Aldar's transformative growth trajectory in 2023.

Some of the notable residential off-plan projects of Aldar Properties include:

• Nikki Beach Residences
• Haven
• Yas Golf Collection Residences
• Saadiyat Lagoons
• Gardenia Bay
• Water’s Edge
• Mamshaat Al Saadiyat

Future Expansion Plans

With Aldar's dynamic growth and strategic investments, the real estate landscape in Abu Dhabi is poised for exciting developments in the coming years. The company is well-positioned for further expansion, with a strong liquidity position, and it aims to maintain a powerful development sales run rate, expecting over AED 30 billion.

Besides planning to launch mega projects in Abu Dhabi, the company is exploring opportunities in Saudi Arabia as well. The real estate firm has plans to expand its geographical footprint internationally.

To diversify its portfolio, Aldar also made international strides, acquiring UK developer London Square and investing in logistics and storage assets in Europe through a partnership with Carlyle. The company has recommended a dividend of AED 0.17 per share, representing a total payout of AED 1.3 billion to shareholders in 2023.