Monday, Apr 23, 2012

Gulf News

Abu Dhabi: Aldar Properties, the largest developer of commercial properties in Abu Dhabi, does not need further financial help, Mohammad Al Mubarak, deputy CEO, told Gulf News yesterday.

The company, which re-developed Al Raha Beach as well as part of Yas Island, was twice bailed out by the Abu Dhabi government and its investment arm Mubadala in the past 18 months.

We are in a healthy financial position. We are comfortable on the fin-ancing side and we are committed to repaying all our debts on time.

Therefore, the company does not need any financial help from the government, Al Mubarak said.

Recently, the National Bank of Abu Dhabi extended a Dh4 billion loan to Aldar to meet its general expenditures.

Asset sales

Marwan Shurrab, vice-president, assistant fund manager and chief trader at Gulfmena Alternative Investments Ltd, told Gulf News that Aldar was currently in a good financial position after the sale of some assets to the Abu Dhabi government.

We saw in the beginning of 2012 that the Abu Dhabi government moved to buy assets from Aldar to help deleverage its balance sheet, said Shurrab.

This provided cash to meet the gap that was expected to be faced in 2012. This helps Aldar to be in a good financial position to meet its financial obligations, he said.

The Abu Dhabi market and economy are going in all sectors.

We had seen a demand on the middle income housing and we are mulling targeting the low income housing market in the emirate of Abu Dhabi. One aspect untapped is low-cost housing, Al Mubarak added.

The market is growing and it should be well managed by all developers, Al Mubarak said.

This could be either through consolidation or other means, he said.

With regard to the proposed merger with Sorouh, Al Mubarak said: It is under study right now.

Last month both developers started talks on a possible merger which could create a new entity.

Sorouh officials declined to comment on the merger process.

Rent to decrease

Abu Dhabis real estate sector is becoming more competitive as a large number of high quality projects are delivered in all sectors, a report by Jones Lang LaSalle showed.

Significant increases in supply across all sectors amidst weak demand and tight economic conditions are causing rents to correct from the unsustainable highs of the boom years.

Rents are expected to decrease further in line with future additions to supply, the report said.

Residential stock in Abu Dhabi increased by 2,800 units over the quarter. Additions to supply were provided by Al Muneera and Al Zeina on Raha Beach, four towers on Marina Square, St Regis on Saadiyat and apartments on Rawdhat.

By Shehab Al Makahleh, Staff Reporter

Gulf News 2012. All rights reserved.