The credit rating of Aldar Properties was upgraded to investment grade by Standard & Poor’s on Monday, citing improvements in its financial profile and the increase in recurring rental income following the opening of Yas Mall.
S&P’s action, which follows a similar move by Moody’s last month, has been welcomed by Aldar’s CEO Mohammed Al Mubarak.
S&P said in a statement that it expected the Abu Dhabi-based developer to continue to benefit from continued property demand in the UAE capital.
The ratings agency also upgraded Aldar’s $750 million Trust Certificates due in 2018 to investment grade, raising the rating from BB+ to BBB-.
Al Mubarak said: “I am very pleased that once again Aldar’s financial strength has been acknowledged by the market.
“This upgrade from S&P reinforces Aldar’s strategy and the benefits that deleveraging and recurring revenue growth can bring to our business. As Abu Dhabi’s largest developer it is important that we act quickly and efficiently to deliver product to market and our financial strength is an important element of our growth story.”
Over the 12 months, the company has significantly deleveraged the business, reduced its cost of borrowing and extended its maturity profile, he added.
During the year, Aldar delivered a number of key projects, including The Gate Towers, al Rayyana and Yas Mall, reducing the development risk and significantly growing recurring income.
As at Q3, recurring income had reached an annualised figure of approximately AED1 billion and is on track to reach AED1.6 billion, S&P said.
It added that the growth will be driven by Yas Mall, Aldar’s flagship asset that opened on November 19.
As at September 30, Aldar’s total assets were AED38.21 billion.
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