Aldar Properties reaffirms its commitment to Egypt

UAE’s Aldar Properties has reaffirmed its commitment to long-term strategic investment in Egypt after a media report said the property developer will hold off any further investments in the country until conditions there stabilise.

Earlier on Wednesday, Reuters reported that a senior executive had said Aldar will hold off any further investments in Egypt until conditions there stabilise.

“We are not putting any more money into the business until things stabilise further,” a senior executive at Aldar said to Reuters adding that the company remains positive on Egypt in the long term.

Aldar, along with Abu Dhabi fund ADQ, acquired about 85.5 per cent of The Sixth of October for Development and Investment (SODIC) shares in April 2021 for $198m (EGP6.1bn).

The property firm said in a bourse filing that the SODIC deal was, “one the largest foreign direct investments into the Egyptian real estate sector”. Following the acquisition, SODIC achieved EGP21.3bn in development sales in 2022 which represents an 87 per cent year-on-year (YoY) growth.

The investment in SODIC was to serve as a platform to expand the company’s real estate portfolio in Egypt.

Aldar said SODIC’s positive performance spilled over into 2023 with EGP3.1bn in sales and reservations in the first quarter of the year. SODIC’s future growth potential continues to be positive with a revenue backlog of almost EGP35bn.

The Egyptian property firm is working on the expansion of its landbank in multiple areas across the North African country including west Cairo, east Cairo and the North Coast.

Aldar’s performance in Q1 2023

Meanwhile, Aldar posted a 22 per cent increase in Q1 2023 net profit to $228m (Dhs836m), driven by robust demand from both international and resident expat buyers, with record quarterly development sales of Dhs4.5bn.

The property developer’s revenues surged by 14 per cent to Dhs3.1bn in Q1 2023, compared to Dhs2.7bn during the same period a year earlier. Aldar said its revenue backlog hit a record Dhs18.8bn which provides visibility over the next two to three years.

Talal Al Dhiyebi, group CEO of Aldar Properties said, “Aldar has maintained positive momentum in the first quarter of 2023, reporting a strong set of results against the backdrop of positive economic fundamentals in the UAE.”

Aldar Development achieved property sales rose by 105 per cent to Dhs4.5bn, the property firm’s highest-ever quarterly sales while its revenues increased by 8 per cent YoY to Dhs1.9bn. Egypt’s SODIC contributed Dhs177m to the company’s Q1 2023 revenue with earnings before interest, taxes, depreciation and amortisation (EBITDA) standing at Dhs3m.

The property firm’s investment unit, Aldar Investment, reported revenues of Dhs1.2bn in the first three months of the year, up 45 per cent compared to the same period last year. The unit said its EBITDA reached Dhs536m, up 43 per cent during the same period in 2022.

The performance of Aldar Investment, which has Dhs32bn assets under management, was attributed to higher occupancy rates, strong rental rates and contributions from new acquisitions across the portfolio.

The property firm reported solid performance across its diversified investment portfolio driven by a buoyant rental market and rising occupancy across the portfolio, with recent acquisitions performing above expectations.

Read: Abu Dhabi’s Aldar Properties posts 22% jump in Q1 2023 profit