Aldar targets China as sales to overseas buyers balloon

Aldar

• Property sales to overseas investors and expat residents hit $1.4bn
• Abu Dhabi developer expanding its ‘brokerage network into China’
• Net profit grew 38% year on year, with revenue up 18% in H1

Aldar Properties is working to attract more Chinese customers as it reports a fourfold increase in sales to overseas and expat buyers for the first half of the year.

“One interesting demographic we are starting to see is the Chinese,” said Faisal Falaknaz, group chief financial and sustainability officer at the Abu Dhabi developer.

“It has picked up significantly in absolute terms. But this is something that we’ve been working very closely on over the past year – growing our international brokerage network into China. So, we’re very confident that’s a segment that we’ll be able to grow in the future.”  

• Aldar Education expands into Bahrain and Dubai
• Aldar unveils $136m plan to revamp UAE shopping malls
• Foreign investment up 363% in Abu Dhabi real estate

Sales to overseas and expat buyers hit AED5.2 billion ($1.41 billion) from January to June.

The customers were a “diverse range” of international investors and expat residents, including Russians, Europeans, Britons, Pakistanis, Indians, Arab nationals and GCC nationals, Falaknaz said in a media briefing on Monday.

Three out of 10 property sales in H1 went to resident expats.

“A trend that we are seeing playing out is a lot of resident expats becoming home buyers for the first time,” Falaknaz said.

Despite this increase, international investors and expats still make up just 20 percent of buyers in Abu Dhabi.

By contrast, overseas buyers play a dominant role in Dubai’s property market. Indians were the largest nationality of buyers in the emirate in the second quarter of 2023, followed by Britons and Russians, according to estate agency Betterhomes. UAE nationals were 5th on the list.

Plans for Dubai, Bahrain, Egypt and Saudi

Aldar is also pursuing geographic expansion outside Abu Dhabi.

On Monday it invested an extra AED350 million in its education business, to fund expansion into Dubai and Bahrain as well as acquisitions in its home market.

Aldar entered the Egyptian market in 2021, when it bought a majority stake in real estate developer Sodic, in a joint venture with Abu Dhabi holding company ADQ.  Sodic contributed AED335 million to the H1 revenue of Aldar’s development arm.

AGBI reported in May that Aldar is scouting for development and joint venture opportunities in Saudi Arabia. 

The developer has also teamed up with Dubai Holding, an investment vehicle partly owned by the government of Dubai, to launch a joint venture to build 9,000 homes across three locations in the emirate.

Last month it unveiled a plan to create the GCC’s largest property and facilities management company by merging Aldar Estates with Eltizam Asset Management Group.

Aldar’s H1 2023 net profit grew 38 percent year on year to AED2.1 billion. Revenue rose 18 percent to AED6.3 billion, driven by record development sales of AED11.6 billion. Ten projects have been launched so far this year.

“Geographic expansion is a pillar of our strategy going forward – both across the development business and the investment business,” said Falaknaz.

“Then segment diversification is also very important. You saw last year that we made our first entry into logistics. That’s the space that we are looking to grow further going forward.”

Aldar bought Abu Dhabi Business Hub, a warehouse and industrial complex, last year and plans to expand by “exploring greenfield opportunities to develop new warehousing projects and actively seeking” acquisitions in logistics.

Falaknaz said the sector offered the group “distinct advantages, such as longer leases, higher rental yields and exposure to diverse tenants”.

He added: “We’re not only a developer, we are a very diversified conglomerate.”