Aldar reports strong half-year performance

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• Profit up 57%
• 79% of UAE sales to foreigners
• Healthy demand for offices

Strong interest from international buyers, an increasingly tight office sector and a record development backlog at the end of June helped Aldar Properties to double-digit profit and revenue growth for the first half of 2024. 

Profit rose 57 percent year on year to AED3.3 billion, while revenue surged 73 percent to almost AED11 billion, the Abu Dhabi-listed company said on Monday.

The second quarter’s bottom line increased 37 percent to AED1.8 billion.

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UAE sales to overseas and resident expat buyers reached over AED10 billion, accounting for 79 percent of sales.

“We are experiencing a significant expansion of our customer base and benefiting from the country’s appeal to international investors,” group chief executive Talal Al Dhiyebi said.

Commercial real estate, especially Grade A office and retail, was a bright spot in Aldar’s investment activity, with an overall occupancy rate of 97 percent as of the end of June. 

Demand remains high for good-quality office space, leading to rising rents. 

Occupancy at Al Maryah Tower in Abu Dhabi went up from 50 percent from January to March – the property’s first operating quarter – to 83 percent at the end of June.

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Aldar recently announced it would develop its first commercial building in Dubai, between Sheikh Zayed Road and the DIFC. The project encompasses a tower that also includes a luxury hotel and branded residences.

The emirate saw a year-on-year 8 percent increase in office deals in the first quarter of 2024, according to Dubai Land Department data. Abu Dhabi is experiencing a similarly tight market, according to Faisal Falaknaz, Aldar’s chief finance and sustainability officer.

Such a positive picture stands in stark contrast to other countries, especially in the US and Europe, where office high-rises are struggling to stay afloat amid widespread remote work and record-low occupancy rates. 

“I think one of the challenges that global cities have had is people returning to the office, and this is a very foreign concept in the UAE – almost everybody comes to the office,” Falaknaz said.

Aldar’s offices in Abu Dhabi are at nearly 100 percent capacity. There continues to be added demand coming from hedge funds, family offices, law firms, financial services companies and other professional entities that are relocating their staff to the UAE capital, he said.

“Abu Dhabi is also coming from a very different baseline than where Dubai is today, so it continues to have significant room for growth,” Falaknaz said. 

Aldar separately reported a record development backlog of AED39 billion by the end of the first half of 2024, which includes the highest-ever UAE backlog of AED33 billion, boosting revenue recognition over the next two to three years.