Tuesday, Nov 15, 2011
ABU DHABI (Zawya Dow Jones)--Aldar Properties (ALDAR.AD) Chief Executive Sami Asad said Tuesday he expects 2012 to be a challenging year for the real estate market in Abu Dhabi.
"It will remain a challenging year in 2012. It will be a time for consolidation, reorganisation and restructuring--all of these aspects have to be focussed on," Asad said at the MEED Abu Dhabi conference.
Aldar, like other real-estate developers in the region, was hit hard when the global financial crisis dried up bank lending and hit developers two years ago. Rental prices have since continued to decline in Abu Dhabi, the largest of the emirates in the U.A.E. Sharper price declines in neighbouring Dubai also had a negative impact on demand in the emirate's market.
Asad said that Aldar, Abu Dhabi's largest listed property developer, will be monitoring supply and demand and making sure it is supplying real demand.
"We need to be making sure that whatever we are going to put in the market, there will be demand for it," he said.
Asad said later on the sidelines of the conference that although rising building materials costs was not impacting Aldar's contracts at present, if the situation continued the company could consider changing its formula with contractors.
"In case the market shows any price escalation we will have to look into the formula and adjust it accordingly," he said.
He said the company is unlikely to make further job cuts in 2012 but will focus on delivery of ongoing projects such as Central Market and Al Bateen Park which should be delivered in September 2012.
The company earlier this month said it would cut its workforce by 24%, or 105 people, as it changed focus to adapt to a changed market environment.
"We are focussing on recurring revenues [and will continue to do so] and our core business is continuing, if there is real demand for land sales we could also do it," Asad added.
Aldar Properties last week said it swung to a profit 144 million U.A.E. dirhams ($39 million), in the third quarter of 2011, reversing last year's AED731.2 million loss, as it boosted revenue from land sales and rental income increased.
The developer's shares closed down 0.9% at AED1.05 in a slightly negative overall market.
-By Tahani Karrar-Lewsley, Dow Jones Newswires; +9714 446-1692; Tahani.Karrar@dowjones.com
Copyright (c) 2011 Dow Jones & Company, Inc.
(END) Dow Jones Newswires
15-11-11 1259GMT
