Abu Dhabi firm Aldar Properties reduces its cost of borrowing
Abu Dhabi-based Aldar Properties has repaid a $1.25bn bond, as the property developer continues to deleverage and reduce its borrowing costs.
The bond, which matured at the end of May, carried an interest cost of 10.75 per cent and was repaid using cash and by drawing down on committed liquidity facilities.
Aldar has now refinanced or agreed new terms on all its financing facilities since it merged with Sorouh Real Estate in mid-2013.
Since the merger, the company has reduced its gross debt from AED14.2bn ($3.9bn) to AED10.1bn.
It has lowered its cost of borrowing with its weighted average cost of debt reduced from 5.8 per cent to 2.8 per cent. The company will now pay AED700m less a year servicing its debts, a reduction of 70 per cent over a year.
Having improved its debt position, Aldar is now pushing forward with new real estate developments in Abu Dhabi.
Aldar is planning 23 new real estate projects and publicly launched the first of these projects in mid-April.
The three residential developments have a combined sales value of AED5bn ($1.4bn) and will be built on Yas Island, at Al-Raha Beach and Reem Island in Abu Dhabi.
Benefiting from a rebound in confidence in the UAEs real estate market, Aldar is planning that these new developments will be funded by offplan sales.
We believe these projects will be self-financing, said Abubaker Seddiq al-Khoori, chairman of Aldar Properties on 21 April.
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