Aldar Properties is planning to reduce its remaining gross debt by half to AED5bn by the end of 2015, as the Abu Dhabi developer continues to make progress on cleaning up its balance sheet.
The company, which was hit hard by the financial crisis and a downturn in the UAE capital’s property market, has already brought down its debt from AED14.5bn at the time of its merger with fellow developer Sorouh a year ago to AED10bn today.
“By the end of next year, we will be in a much better position on the debt side,” Aldar executive chairman Abubaker Seddiq Al Khouri told Arabian Business. “Our target is to reduce the debt substantially to AED5bn.
“We will have a stronger and more diversified portfolio of investments. Our target is to increase the portfolio from where we started at AED700m of gross revenues to about AED1.6-1.7bn. We will have a few projects that will be very close to delivery.”
In the year since the merger with Sorouh, Aldar has raised AED8.3bn through bonds and loan issuance, reducing the average cost of its loans from 5.8 percent to 2.8 percent. It has also lowered the interest paid on its debt on an annual basis by 70 percent, to AED300m.
Earlier this year, the developer announced three new projects in Abu Dhabi, and has said there are 20 more in the pipeline.
Al Khoori said that Aldar would focus exclusively on the UAE over the next three years, as the developer aims to make the most of its 77 million square metre land bank, the country’s largest. After that period, he said that the company could expand overseas.
“Going outside your country for development is not that simple,” Al Khoori said. “It might have potential, but we also see potential here…but we would definitely consider opportunities like Kazakhstan, where we would go in with the government and help the government.
The chairman also said that Aldar was working on the final candidates for the CEO position.
“I believe we are very close to finalising that,” Al Khoori said. “I hope we can do it before the end, maybe we’ll surprise you and do it earlier.”
In May, Aldar reported that net profit tripled in the first quarter to AED453m, while revenue rose 6 percent to AED1.72bn.