Aldar Properties acquires UK developer London Square for Dhs1.07bn

Image courtesy: Christopher Pike/ Getty Images

Aldar Properties has completed the acquisition of UK property developer, London Square, for an enterprise value of Dhs1.07bn (GBP230m), the company’s first major investment outside the Middle East region.

The Abu Dhabi-based developer said the deal is aimed at accelerating growth, diversifying revenue streams, unlocking synergies, and driving cross-selling opportunities.

“By exporting its expertise to the UK market through the acquisition of an established and reputable operating platform, Aldar will gain a meaningful foothold in the diverse and dynamic London property market, known for its resilience and enduring appeal to both local and international investors,” the two companies said in a joint statement on Friday.

Aldar and London Square said the transaction should also have a positive impact on sales, given the opportunities to cross-sell across their respective customer base.

“The acquisition of London Square represents our first market entry outside of the region, and is a testament to the company’s management team, governance framework, and business model which has consistently delivered strong performance,” said Talal Al Dhiyebi, group CEO of Aldar Properties.

“The transaction, which is synergistic in nature, gives us the ability to leverage our mutual strengths, shared values, and a common approach to homebuilding to scale London Square while bringing the best of Aldar to bear in the UK’s property market, as we continue to build our foothold outside of the region.”

Founded in 2010, London Square has created a development pipeline worth over GBP2bn and completed over 3,500 homes to date with a pipeline of 930 homes under construction, valued at GBP425m.

The company is widely known for its Nine Elms development, located in proximity of the Battersea Power Station. The development features over 750 luxury homes, affordable housing and 21,500 square feet of commercial and retail space.

London Square operates different segments across its business, enabling Aldar to diversify its development and portfolio exposure into new areas of strategic focus. This includes its core private-for-sale division, London Square Developments, which creates high-quality homes and new communities within Greater London.

The UK – and London in particular – remains a global hub and a strong real estate market, presenting an attractive entry point for Aldar.

Aldar’s growth strategy

With a market capitalisation of Dhs44.7bn as of December 1, 2023, Aldar posted a 48 per cent year-on-year (YoY) increase in Q3 2023 net profit to Dhs949.1m from Dhs613m a year earlier, driven by strong operational performance as the company’s recent acquisitions are positively impacting the bottom line.

The property giant said development sales hit a record Dhs7.8bn in Q3 2023, bringing nine-month sales to a record Dhs19.4bn, with 11 new project launches year-to-date (YTD), surpassing the number of launches last year.

The company has a development backlog valued at Dhs29.1bn for projects that are set to be delivered over the next two to three years. Aldar said the growing vein of overseas and resident expat buyers, collectively accounted for 60 per cent (Dhs10.3bn) of YTD sales in the UAE while overseas sales surged by 160 per cent YTD to Dhs4.6bn.

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