Top Abu Dhabi Developer Is Shopping for Large Property Deals

(Bloomberg) --

Aldar Properties PJSC has built up a cash war chest and is considering investments in large real estate portfolios as Abu Dhabi’s biggest developer seeks to grow its management business.

The company, armed with 6.8 billion dirhams ($1.85 billion) in capital, has the resources to make purchases both in its home market and around the United Arab Emirates, according to Chief Financial Officer Greg Fewer. 

It’s allocated 5 billion dirhams for “immediate deployment,” of which 20% may go toward its acquisition of an Egyptian developer known as Sodic, Aldar Chief Executive officer Talal Al Dhiyebi said in an interview with Bloomberg Television on Thursday.

“We are embarking on our most ambitious ever expansion and growth strategy both domestically” and abroad, he said.

With holdings spanning retail, commercial, residential and its education business, “those are the sectors where we see very interesting acquisition opportunities within Abu Dhabi and the UAE to scale all those different segments,” Fewer said, without naming a likely target. 

Aldar, which primarily operates in Abu Dhabi, has been chasing growth in a cramped market. At home, the company is growing its management business after acquiring Asteco Property Management last year. Beyond the UAE, it’s also looking to gain a foothold in Egypt through a proposed acquisition of a majority stake in Sodic.

“We’ve got a rich pipeline of opportunities across all the areas that we’re focused on -- UAE real estate, Egyptian opportunities as well as Saudi opportunities,” Fewer said on a conference call Wednesday. The company is targeting real estate portfolios that are for the most part either owned by large families or zoned near government entities, he said. 

Pecking Order

With the UAE property market on the upswing, Aldar is vying for the status of the most valuable listed developer in the country with Dubai’s Emaar Properties PJSC. Both are currently worth about $9.2 billion.

Aldar sees “great acquisition” opportunities within retail, commercial, logistics and residential assets, the CFO said. 

In September, it submitted a $453 million offer for a stake of up to 90% in Egypt’s Sixth of October for Development & Investment Co., or Sodic. Fewer said the proposal is pending the regulator’s approval, with a response expected within “days or weeks.”

Aldar is meanwhile planning a significant drive to boost the efficiency of the buildings it operates in Abu Dhabi. It’s conducted a study that will aim to upgrade some energy-consuming systems with newer and more efficient technology, the CFO said. The company is focusing on cooling, heat pumps, lights and other building-management systems, he said.  

Al Dhiyebi said Aldar is looking at spending more than 100 million dirhams across its existing assets on immediate energy improvements, with plans also to invest on making new projects more efficient.

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