Development management income doubled as the company oversees more work for the Abu Dhabi government

Aldar Properties reported a 30 per cent increase in third quarter revenue on the back of higher residential property sales and a growth in income from its third-party development management business.

Revenue for the three months to September 30 grew to Dh2.1 billion ($571.8 million). Net profit rose 8 per cent to Dh416m.

'The strength of Aldar’s business continues to be demonstrated in this challenging year, with our highly diversified business model delivering strong earnings,' Aldar's chief executive Talal Al Dhiyebi said in a statement to the Abu Dhabi Stock Exchange, where its shares trade.

Aldar is the UAE's biggest property developer by market capitalisation, with a value of Dh20.92bn at close on Wednesday.

Revenue from the company's development management business doubled to Dh1.29bn on the same quarter last year, and is set to expand even further following the agreement announced in late October that it will manage Dh30bn worth of Abu Dhabi government capital projects, overseeing the work of Abu Dhabi General Services Company, known as Musanada.

Aldar already manages about Dh5bn worth of government projects under a separate agreement announced last year.

Some of the new assets being taken on include the Riyadh City and Baniyas North projects, as well as schemes in the Al Ain and Al Dhafra regions that will eventually be developed into more than 25,000 land plots and villas, with associated infrastructure, for Emiratis.

The company said the higher sales in the quarter were driven by 'robust demand for high-end development projects' such as its Water's Edge, Nareel Island and Mamsha schemes.

'Strong sales at our prime developments reflects sustained investor confidence in Abu Dhabi’s real estate fundamentals, which are supported by the Government’s commitment to implement its economic growth and diversification strategy. Aldar is proud to be partnering with the Abu Dhabi Government as it invests further in strategic capital projects,” Mr Al Dhiyebi said.

Net profit for the nine month period was 11 per cent lower than in the same period last year at Dh1.2bn, but revenue was 17 per cent higher at Dh5.86bn. As of the end of September, the company had Dh2.5 billion worth of free cash and a further Dh4bn of undrawn credit facilities.

'Given the company’s balance sheet strength and robust cash position, Aldar continues to actively pursue opportunities to invest in both our development pipeline and in expanding our investment portfolio,' Mr Al Dhiyebi said.

Abu Dhabi's residential market is continuing to soften, but the rate of price decline is slowing and transaction levels have picked up from a lull earlier in the year when social distancing measures put a brake on activity, according to a Q3 market report by Chestertons.

Average apartment and villa prices were 4.8 per cent and 4.7 per cent lower than the same period last year, but the decline on the previous quarter slowed to just 0.6 per cent and 0.2 per cent, respectively.

“Abu Dhabi enjoyed a more active third quarter, with both sales prices and rental rates showing greater stability,' Chris Hobden, head of strategic consultancy at Chestertons Mena, said.

“Covid-19’s economic impact will undoubtedly continue to weigh on rental rates short-term, with improvements in residential market performance over 2021 largely contingent on a broader economic recovery.”

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