Abu Dhabi-based Aldar Properties profit rose 194 per cent to AED453m ($123.33) in the first quarter of 2014.
The profit growth was driven by the handover of infrastructure and units to the government and residential customers, as well as higher recurring revenues from its hospitality and investment property portfolio following the merger with Sorouh Real Estate in June 2013. Recurring revenue in the first quarter totalled AED497m, a 22 per cent year-on-year increase.
We are seeing impressive sales and leasing activity. Debt has been reduced by the repayment of AED2.8bn in loans and we are on track to meet synergy savings for the merger, says His Excellency Abubaker Seddiq al-Khoori, the firms chairman.
In April, we embarked on the next phase of Aldars development story with the launch of three new developments with a combined gross development value of approximately AED5bn. We are also assessing 20 other development projects as we look to monetise Aldars extensive land bank.
The company is expected to reduce its debt significantly over the coming two years, after which it can be serviced using recurring revenue streams.
Aldars updated financial policy includes a loan-to-value ratio target of 35-40 per cent for its investment property portfolio, which translates to a planned debt reduction to about AED5bn, from more than AED14bn in October 2013, said Standard & Poors.
As part of its deleveraging strategy, it raised a $750m, five-year sukuk in November 2013.