A bu Dhabi’s biggest developer is the epitome of Emirati grandeur. From projects that ooze opulence – no-one else can lay claim to developing the first hotel to be built over a Formula 1 race circuit – to a striking, orb-like glass HQ at Al Raha Beach, Aldar Properties is a beacon of glamour and ambition.
Any accusations of style over substance can be quashed, at least in part, by the group’s AED718m (£127m) net profit and AED1.3bn Q4 turnover figures announced in February. Clearly the company is doing something right, particularly after what was a catastrophic period for the whole region back in 2009. The trick now will be managing success through the upswing.
The man charged with this task is Mohammed Khalifa Al Mubarak – who was appointed to the top job in July 2014, after a year-long search for the right candidate.
He may only be in his early 30s but he knows the company inside out, having joined in 2006 before swiftly climbing the ranks to deputy chief executive and chief portfolio management officer.
Relatively unscathed
The past five years have been erratic, unstable and unpredictable for the UAE property industry. Aldar – number 97 in the Estates Gazette Top 100 Global Investors league – escaped relatively unscathed and, in fact, received billions of dirhams in government support after the collapse of the neighbouring Dubai property market in 2008.
The group – which now employs more than 370 people at its HQ – then completed a government-orchestrated merger with former rival Sorouh Real Estate in June 2013. The combined company now has a $12bn (£7.8bn) portfolio, which Al Mubarak says is performing strongly, and is one of the reasons it has refused to put the brakes on developing its 828m sq ft landbank.
He believes the new, integrated powerhouse can learn from past mistakes. “There was a time when the market in Abu Dhabi became crazy,” he says. “There were investments coming from left, right and centre and it created unrealistic growth. And with this came a realistic downfall – the crash. While this was a difficult time from a financial perspective, this period was a good change for us and allowed us to streamline our business and realise efficiencies. This created a new, mature Aldar that is well-positioned for growth.”
Roaring results
Substantially reducing debt is a major target for the firm, and, says Al Mubarak, part of a five-year business plan put in place in 2013. Gross debt stood at AED9.2bn at the end of last year, and this is expected to be trimmed to AED6bn by 2015-16.
In the first year of the new business plan – which lists priorities such as deleveraging the balance sheet and monetising the landbank – Aldar can tick off a number of milestones. So far it has launched AED5bn (£86m) of homes on the market, as well as ensuring its Yas Mall was fully let.
The development includes 400 shops and a 20-screen cinema, and is poised to rival some of the mega-malls in neighbouring Dubai. “Yas Mall will generate AED400m of net operating income from the mall’s recurring annualised revenue,” says Al Mubarak.
“When I first joined Aldar, Yas Island was just an island with nothing on it, and now you can see what it has become over the past 10 years: a major leisure destination attracting millions of visitors from all over the world – it is just fantastic.”
Abu Dhabi and beyond
Al Mubarak has no plans to slow down. He is already thinking about phase two of the Yas Mall and beyond the present business plan.
“We have a 77m m2 landbank and we have a strong grasp of the market dynamics in the region. This allows us to remain the dominant player within the city of Abu Dhabi,” says Al Mubarak. But there are plans afoot to cast the Aldar net more widely.
“We are always looking for the right opportunities for our shareholders, be it in the UAE, UK or elsewhere. Any project must be commercially viable and, in return, create value for our shareholders.”
Because whatever happens, and wherever he looks next – Aldar is the priority. “Our vision is to be the most recognised and trusted real estate developer in Abu Dhabi and beyond.”
With more than a hint of Emirati grandeur.
