Aldar sees international real estate opportunities
Aldar Properties Company sees uncertain global market conditions generating promising real estate openings for the Abu Dhabi property company, its Chief Financial Officer Shafqat Malik said on Monday.
"The market conditions are such that there are some attractive opportunities," Malik told the Reuters Islamic Finance Summit in Dubai.
With the exception of the US, where Aldar does not have the knowledge it thinks it needs to enter the market, the company is seeking talent as well as assets in any acquisition it makes and will not be rushing into any purchases.
Aldar, which is owned by leading Abu Dhabi institutions as well as more than 20,000 other investors there, has developed residential beach resorts and commercial estates in Abu Dhabi.
Malik declined to comment on whether Aldar was looking at the Spanish market, where Investment Corporation of Dubai is considering bidding for Spanish property firm Colonial, whose shares have halved in value since mid-December as investors lost confidence in the once booming sector.
But he said Aldar was actively working on two projects in Malaysia and Kazakhstan, which were strategic investments which fitted with government-to-government relationships.
As part of its development plans, Aldar needs to raise between $10 billion and $15 billion over the next three to five years.
"Our cash requirements over the next three to five years are between $10 to $15 billion, which will be funded through our sales programme ... which is one part, and the debt financing," Malik said.
But despite difficult capital market conditions, Aldar would have no problem in accessing cash when it needed to and sales of its properties were buoyant.
"Yes the markets are closed, yes the markets are difficult. However, I strongly believe that if you have got the right credit, the right growth story, there is enough liquidity in the market still to raise the sums we need to raise ... I can't see a problem for Aldar to go into the market and raise the money when we need it," Malik said.
Aldar would be looking at the most liquid markets for its financing when it needed it and there were signs that the Islamic market was very attractive, Malik said.
Malik said Aldar's focus on the Abu Dhabi real estate market meant that the group would continue to benefit from double digit rental and capital growth over the next few years.
"Our expectation is that this growth will continue in double digits over the next two years," Malik said.
This would stabilise to a level of between 7 and 8 per cent by 2010 to 2011, in both rental and capital growth.
With the Abu Dhabi economy continuing to benefit from strong oil revenues and a long-term infrastructure and development plan stretching out to 2030, Aldar sees the outlook for continued growth in foreign workers moving there remains strong.
"Our target market is over 70 per cent of the people who will be living and working in Abu Dhabi, which is completely opposite to what you have seen in Dubai," Malik said, adding that Aldar had sold more than Dh3 billion of property over the last eight months.
Aldar's Abu Dhabi land bank was last valued at $10 billion at the end of 2006. Malik said Aldar was conservative in calculating the value of its land bank, but declined to put a revised value on it, something he said Aldar would be doing soon.
Aldar will continue to use both real estate sales and borrowings in order to meet its cash requirements.
At the end of 2007, it had Dh21 billion of undrawn facilities and Dh8 billion of drawn facilities, Malik said. (Reuters)
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