Jul 31 2012
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Sorouh Real Estate PJSC Second Quarter and Half Year Results 2012
Sorouh continued its strong performance in Q2. Net profit was up 33% year-on-year, reflecting continued strengthening of sustainable recurring income streams from Sorouh's investment portfolio, as well as revenues from its National Housing projects, subsidiaries and the release of contingencies and provisions.
Revenues from National Housing projects increased significantly, generating nearly AED1.2bn of revenue for the half year, representing an increase of 247% year-on-year
250 parking spaces in Sun & Sky Towers were sold, resulting in AED28 million of revenue.
AED82 million of other income derived principally from the release of contingencies and provisions that are no longer required on completed projects.
Robust financial position, with cash collections of approximately AED1billion in H1. AED1.1 billion of cash on balance sheet with low gearing of 41%.
Abubaker Seddiq Al Khouri, Managing Director, Sorouh, commented:
"We are very pleased to be able to report a continued strengthening of profitability in the second quarter and for the first half of the year, as the business continues on its path to maturity. The quality of earnings continues to improve through the diversification and strengthening of revenue streams. National Housing is now an important contributor to the quarterly revenue mix along with the increased amount of leasing income. At the same time, we are continuing to invest across our development portfolio to ensure that we meet the demand for high quality product with a pipeline of some 7,000 units."
Q2 2012 Development Portfolio Update
Shams Abu Dhabi
- Sun & Sky Towers are now an established community with approximately 1,000 families living at the development along with key commercial tenants.
- BOUTIK Shams Mall has now commenced operations with anchor tenant Waitrose supermarket together with numerous other retail operators including Italianissimo, La Brioche, Yogen Fruz and Macondo, among others. Commercial tenants at Sun & Sky Towers include the Austrian Embassy, Agthia Group, Al Ramz Financial Services, Advanced Integrated Systems and Arabian Construction Company.
- The Gate Towers are over 80% complete and advancing rapidly. At present, all sections of the penthouse bridge structure have been raised and locked in place. This will house the unique penthouses at the Gate Towers.
- Sorouh has completed the infrastructure on Shams Abu Dhabi and continues its de-risking programme by handing over key utilities to the relevant authorities. In H1 2012, 12 sub-developer plots were under construction, one sub-developer property has obtained its Building Completion Certificate and two more sub-developer properties are expected to be completed in 2012.
- The development is almost 75% complete and progressing well, with infrastructure development and the construction of the residential buildings moving at a rapid pace. The development is on track for phased completion and delivery at the end of 2012.
- All infrastructure works at the Saraya master-planned development, near the Abu Dhabi Corniche, are complete and five plots are currently under construction by sub-developers. This is a positive development for the location and is a catalyst for other sub-developers. It has also created an interest in the secondary market for the sale of land plots.
- Construction at the Watani development is progressing well, and Building Completion Certificates for phases one and two have been applied for. Both phases are on track for completion in 2012.
- Construction work continues on Sorouh's two other National Housing projects, at Ghuraibah in Al Ain and Al Sila'a in the Western Region.
Investment Properties - Residential:
- al rayyana received its Building Completion Certificate in July 2012. The 1,537 units are ready for occupation commencing August 2012. The main anchor tenant is scheduled to commence its tenancy in August 2012 as well. Furthermore, an aggressive leasing programme is currently underway and two bulk lease agreements have been signed with companies in the education sector for 215 apartments. A separate Head of Terms has been executed with a major healthcare provider for 572 residential units. This brings the total leasing commitments to 1,074 units, representing 70% of the total number of residential units.
- In addition, a long-term lease agreement has also been signed with a retail anchor tenant, Maybury, in BOUTIK al rayyana.
- Over 85% of units have been leased as at end of first half of 2012. Almost half of the retail space has now been leased out to Spinneys, the high-end supermarket chain.
Investment Properties - Hospitality and Retail:
BOUTIK Al Ain
The development is complete and due to open in Q4 2012. Attractions include a cinema and children's entertainment area. Carrefour signed during Q1 as the anchor tenant for the mall.
Tilal Liwa, the hotel located in the Western Region, remains profitable and cash flow-positive with occupancy at around 69% for the first half of 2012.
RE: Potential Merger
On 11 March 2012, Aldar Properties PJSC and Sorouh Real Estate PJSC announced that the two companies were going to explore the merits of a potential merger and whether it would be in the best interest of all stakeholders.
On 10 June 2012, the two companies announced that a steering committee including representatives from Aldar and Sorouh had been formed to evaluate a potential merger. The companies also announced that the due diligence process was underway to assess in detail the implications for all stakeholders and that this process would take a number of months. The due diligence process is well under way and a further update will be made as and when appropriate.
About Sorouh Real Estate PJSC
Abu Dhabi-based Sorouh Real Estate PJSC is one of the UAE's leading property companies.
As part of Sorouh's partnership with the Abu Dhabi Government in its Plan 2030, the Company has been awarded the contract to master plan three investment zones in Abu Dhabi - Lulu Island; Shams Abu Dhabi on Al Reem Island; and Seih Sdeirah, the site of the alghadeer development.
Established in June 2005 with capital of AED2.5 billion, Sorouh is now one of the largest real estate developers listed on the Abu Dhabi Securities Exchange.
Sorouh Real Estate
Chief Financial Officer
Head of Investor Relations
Alya Al Mutawa
Head of Corporate Communications
+971 2 444 0006
+971 2 234 4600
© Press Release 2012
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