Aldar develops the heart of Abu Dhabi’s vision

The sleek, modern luxury of the Yas Acres' sales centre on Yas Island is a throwback to the glory days of real estate eight or nine years ago. Except there is a very 2016 feel to it all. 

The 1,315-villa project's every detail is shown to prospective buyers on big, interactive screens embedded in the tables around the lounge area. Seen through the window, retro-looking bicycles are a languid feature of the back garden. The parking lot offers a view of the Formula 1 track opposite, which was also built by the Abu Dhabi developer Aldar. There is an unmistakable air of an organisation whose people are confident of where they are headed. 

The chief executive Mohammed Al Mubarak articulates this mood with passion and intensity. 

"Today we are celebrating a big success for all the teams in Aldar, the sales team [in particular]. I put a lot of pressure on these guys to really sell, to go out there in a tough market, and they have accomplished the mission. There are a lot more missions to come," he says of the Yas Acres project, without giving any sales figures since it was launched last month. 

Mr Al Mubarak also talks with humility about the journey that he and the property company has been on in the years since the boom ended.

"I've been part of this Aldar family from day one, so I have seen the good, the bad and the ugly. It has helped me grow as an individual, mature as an individual, it has helped me take all the tools that I need to run an organisation like Aldar," he says. 

He took on the role of chief executive in the summer of 2014, after the merger between Aldar and fellow Abu Dhabi developer Sorouh, a deal that helped to stabilise the local property market at a critical time for the emirate's entire economy. 

In the past three years, the company has undergone a transformation that has doubled revenues and tripled net operating income, going "from a pure property play, Aldar is expected to generate the bulk of its revenue and profitability from a diversified and growing recurring portfolio", according to Citibank research. 

However, it is the return to its roots as a developer that offers the most satisfaction for Mr Al Mubarak. Off-plan launches in the past two years, apart from the Dh6 billion Yas Acres, include Yas Island's West Yas, Mayan and Ansam schemes and the affordable housing project Meera on Reem Island's Shams Abu Dhabi as well as others at Al Raha Beach. 

"I am a developer here. My DNA is a developer," says Mr Al Mubarak, waxing lyrical about the company's broad and rich land bank, which has a conservative book value of about Dh4bn, analysts say. 

"Starting with that canvas puts Aldar in a very strong situation. Obviously we do not want to do everything at once. You start losing sense of quality, you start losing sense of time. You don't really have a finished product like you want it to be. This is where Aldar has really strategised itself over the last couple of years to focus on the developments it really wants to complete as a whole." 

Yet, according to analysts, Aldar's share price – it is listed on the Abu Dhabi Securities Exchange – attributes no value to its land bank despite Dh3.2bn in off-plan sales between 2014 and 2015 and a steady pipeline of new launches. This is because of an assumption that the local property market could always crash again. 

"I set very clear goals to my board [when I became chief executive] on what I am going to achieve, whether it is increasing my recurring revenue, decreasing my debt, making sure I have strong development pipeline, to manage my land bank," says Mr Al Mubarak, highlighting the company's enviable track record of delivery. 

The sleek, modern luxury of the Yas Acres' sales centre on Yas Island is a throwback to the glory days of real estate eight or nine years ago. Except there is a very 2016 feel to it all. 

The 1,315-villa project's every detail is shown to prospective buyers on big, interactive screens embedded in the tables around the lounge area. Seen through the window, retro-looking bicycles are a languid feature of the back garden. The parking lot offers a view of the Formula 1 track opposite, which was also built by the Abu Dhabi developer Aldar. There is an unmistakable air of an organisation whose people are confident of where they are headed. 

The chief executive Mohammed Al Mubarak articulates this mood with passion and intensity. 

"Today we are celebrating a big success for all the teams in Aldar, the sales team [in particular]. I put a lot of pressure on these guys to really sell, to go out there in a tough market, and they have accomplished the mission. There are a lot more missions to come," he says of the Yas Acres project, without giving any sales figures since it was launched last month. 

Mr Al Mubarak also talks with humility about the journey that he and the property company has been on in the years since the boom ended.

"I've been part of this Aldar family from day one, so I have seen the good, the bad and the ugly. It has helped me grow as an individual, mature as an individual, it has helped me take all the tools that I need to run an organisation like Aldar," he says. 

He took on the role of chief executive in the summer of 2014, after the merger between Aldar and fellow Abu Dhabi developer Sorouh, a deal that helped to stabilise the local property market at a critical time for the emirate's entire economy. 

In the past three years, the company has undergone a transformation that has doubled revenues and tripled net operating income, going "from a pure property play, Aldar is expected to generate the bulk of its revenue and profitability from a diversified and growing recurring portfolio", according to Citibank research. 

However, it is the return to its roots as a developer that offers the most satisfaction for Mr Al Mubarak. Off-plan launches in the past two years, apart from the Dh6 billion Yas Acres, include Yas Island's West Yas, Mayan and Ansam schemes and the affordable housing project Meera on Reem Island's Shams Abu Dhabi as well as others at Al Raha Beach. 

"I am a developer here. My DNA is a developer," says Mr Al Mubarak, waxing lyrical about the company's broad and rich land bank, which has a conservative book value of about Dh4bn, analysts say. 

"Starting with that canvas puts Aldar in a very strong situation. Obviously we do not want to do everything at once. You start losing sense of quality, you start losing sense of time. You don't really have a finished product like you want it to be. This is where Aldar has really strategised itself over the last couple of years to focus on the developments it really wants to complete as a whole." 

Yet, according to analysts, Aldar's share price – it is listed on the Abu Dhabi Securities Exchange – attributes no value to its land bank despite Dh3.2bn in off-plan sales between 2014 and 2015 and a steady pipeline of new launches. This is because of an assumption that the local property market could always crash again. 

"I set very clear goals to my board [when I became chief executive] on what I am going to achieve, whether it is increasing my recurring revenue, decreasing my debt, making sure I have strong development pipeline, to manage my land bank," says Mr Al Mubarak, highlighting the company's enviable track record of delivery. 

"We will be announcing a major attraction on that island that's going to benefit all the residents of that island and the city of Abu Dhabi," says Mr Al Mubarak, declining to give more details. 

"That is a part of our thank-you to the city, the Government of Abu Dhabi and the residents of Reem Island." 

This approach has also motivated the company's desire to help the Government to improve regulation of Abu Dhabi's property sector. New legislation that took effect at the start of this year was drafted with input from the property industry. 

The law includes the establishment of a real estate register, provides for owner associations and requires developers to set up escrow accounts for off-plan projects. Mr Al Mubarak gives the Government a lot of credit for encouraging this dialogue which, after a longer than expected process, ultimately has provided much greater protection for investors and benefited Aldar. 

"It has given a certain trust in the Abu Dhabi real estate market and a certain trust in Aldar," he says. 

The maturing of both the market and Aldar has been critical in building up this trust, he says. 

"The last economic crisis really helped everyone mature. Now is the right time to invest." 

The current economic slowdown in the region and the softening of the property market in the UAE, triggered by the lull in oil prices, does not concern him too much. 

"I like to use the word efficiency. I think times like this make you a lot more efficient, make you a lot more focused. I'm sure it is the same with the Government." 

He is grateful for everything that the Government of Abu Dhabi has given the company. Support during the crisis, when billions of dirhams of assets were sold to the Government, including the F1 track, helped to stave off any lasting damage and gave Aldar the chance to turn itself around. 

"But I don't want to rely on the Government. At the end of the day I am a publicly traded company. I have shareholders. I don't want to go to them and say my biggest revenue comes from managing projects for the Government. They don't want to see that. They want to see me take the calculated risk and coming back to them with some big returns on their investments," he says. 

That the Government is committed to completing its major infrastructure projects such as the Louvre Abu Dhabi and the airport's Midfield Terminal expansion will, however, ensure that the flow of lucrative management projects remains steady beyond its visible pipeline of about two years currently. 

"We are working closely with Musanada and some of the other government entities at an early stage and we are deciding together; ‘is this a project that is worthwhile?' ‘Is this a project that has to start in 2018, 2019 or 2020?' It is a collective understanding and based on these decisions there is going to be projects launched in the near future," says Mr Al Mubarak. 

And what of that future? 

"I think Aldar has the building blocks to be a world-class developer, to compete with some of the best, the Westfields of this world, the Relateds of this world," he says. –

Source: The National