Aldar eyes Western firms hit by subprime crisis

BARGAIN HUNT: Aldar is on the lookout for acquisition targets struggling due to the fallout from the subprime crisis, Barrott said. (ITP Images)

Abu Dhabi-based developer Aldar Properties is eyeing real estate companies in the West struggling from the fallout of the subprime mortgage crisis and ensuring credit crunch, the company’s CEO told ArabianBusiness.com on Tuesday.

Speaking on the sidelines of Cityscape Abu Dhabi, Ron Barrott said many companies had been affected by the crisis and Aldar was on the lookout for acquisition opportunities, provided the circumstances are right.

“There are markets we are watching carefully - there are opportunities in mature markets, and if something suits we will do something about it,” he said without being more specific.

Barrott said Aldar, the second-largest UAE property developer by market value, would consider expansion into the US, Europe, Asia, but only with other investment partners.

Aldar has been linked with several major UK real estate developers as the company attempt to gain exposure to more mature markets.

The UK's Times newspaper reported last month that Aldar is considering a bid for one of three FTSE 100 companies - Hammerson, Land Securities and British Land - as it looks to capitalise on weakening share prices due to the downturn in the UK property market.

RELATED: Aldar eyes UK property giants

Barrott said Aldar was not immune to the subprime crisis, but the company had banks' backing, although he predicted the cost of borrowing would go up.

“We’re not unaffected by the sub-prime crisis… [but] our banks worldwide have all confirmed they will continue to support us. I can see our cost of money level is going to be a little bit more," he said.

Despite Aldar's plans to expand outside the UAE capital, Barrott ruled out developing any projects in neighbouring emirate Dubai in the foreseeable future.

He said that with Abu Dhabi holding 87% of the UAE’s land area, it was unlikely the company would ever need to enter the Dubai market.

“Aldar is in Abu Dhabi, but we are not in Dubai. We would not enter Dubai at this point in time, there’s no necessity for it,” he said.

On the soaring cost of construction, Barrott said Aldar had put plans in place to deal with the problem, but cautioned the problem would take some time to solve.

“Construction costs are going up, there’s a lot of greed in the market with demand outstripping supply, but we have it under control. We are bringing in suppliers and contractors to equalise the supply and demand chain. We are starting to solve it [the problem], but its going to take a while,” he said.

Aldar last month posted an almost tripling in first-quarter profit on land and property sales, with net income surging to 1.37 billion dirhams, or 0.59 dirhams per share, from 450.67 million dirhams, or 0.26 dirhams per share, in the year-earlier period.

Barrott said Aldar currently has projects underway worth in excess of $70 billion.

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