Aldar Properties' bond issues touch Dh40 billion

Aldar, supported by Government-owned Mubadala Development, is one of the largest developers in the region. (SUPPLIED)

Real estate developer Aldar has issued bonds worth nearly Dh40 billion in just over one year to become one of the largest borrowers in the Gulf in such a short period of time, a company official said yesterday.

Shafqat Malik, chief financial officer at the Abu Dhabi-based Aldar Properties, said the company issued nearly Dh30bn in conventional and Islamic bonds last year and around Dh9.4bn this year.

But he declined to say if there are plans for more borrowing this year as the company is pushing ahead with mega property projects in the UAE and other countries, with a total value of nearly $70bn (Dh257bn).

"Our bond issue last year totalled around Dh30bn and we have just closed a sukuk issue of nearly Dh3.7bn. Another issue worth around Dh3.5bn was made for Mubadala last month," he told Emirates Business.

" So far this year, the total issue is worth around Dh9.4bn… this means that we have issued a total Dh39.4bn worth of sukuk and other bonds… they include funds for our projects and convertible bonds to raise capital."

Malik said he could not specify if there are plans for more bond issue this year on the grounds any new issue should be decided by the company's board.

Dealers said Aldar would not have any problem borrowing more funds in the future given its high credit rating and strong financial position. Another factor is that the company is supported by the Abu Dhabi Government through its Mubadala Development Company, a major shareholder in Aldar.

Aldar, one of the largest real estate developers in the Middle East, said last month it had issued Dh3.56bn in interest-free convertible bonds for Mubadala to get cash for its projects and at the same boost Mubadala's shareholding in Aldar and give it a stronger participation in its decision-making process.

In a statement this week, Aldar said it had raised around Dh3.75bn from the issue of dirham-denominated Islamic bonds. The statement reported strong demand from investors in Abu Dhabi, Dubai, Bahrain and London, where subscription lasted about one week.

The issue of sukuk last week and previous borrowing indicated a boom in the company's business and its growing reputation and financial position.

According to its balance sheet, Aldar's net earnings shot up by nearly 203 per cent to Dh1.366bn in the first quarter of this year from around Dh450 million in the same period of last year.

"This was a three-fold rise… it is a massive increase considering the fact that the average profit growth in the companies listed on the Abu Dhabi Securities Exchange was around 40 per cent… I believe this is one of the main reasons that is encouraging the company to seek loans,' said Ziad Dabbas, share dealing adviser at the National Bank of Abu Dhabi.

Besides funding of projects, Aldar has converted part of previous sukuk into shares to boost its capital to face growing business, with the latest increase last week boosting its paid up capital to Dh2.44bn.

"Aldar's bond issue and other operations are moving according to the plan which is aimed at maintaining its strong position and high performance," Malik said.

Besides Mubadala, the other key shareholders in Aldar are the government-owned Abu Dhabi Investment Company, Abu Dhabi National Hotels Company, the National Corporation for Tourism & Hotels and National Investor.