Aldar Properties, the developer behind some of Abu Dhabi’s most eye-catching projects, yesterday posted its third straight profitable quarter since the company’s debt was restructured in January.

Al Zeina

Net profit for the third quarter was Dh144 million (US$39.2m), compared with a loss of Dh731.2m in the same period a year ago, as the company continued handovers of homes in Raha Beach.

Revenue for the quarter jumped to Dh3.13 billion, compared with Dh505.3m the same period a year ago, the company reported.

The company’s quarterly results includeDh2.7bn from the sale of land on Yas Island to the Abu Dhabi Government, part of the January funding plan.

The company also said it was able to raise Dh734.6m in bank borrowings, “demonstrating continued access to funding markets”.

“This period has seen good progress in areas of strategic importance to the business,” said Ali Eid Al Mheiri, the chairman of Aldar Properties.

Aldar cut 105 employees, 24 per cent of its staff, as part of a corporate restructuring last week. The company, which developed Ferrari World and Raha Beach, said it would cut back on development plans and focus more on property and asset management.

The results for the third quarter highlighted many of the key areas for Aldar as it reshapes the company.

Rental income from offices and retail space increased to Dh537.3m for the first nine months of the year compared with Dh269.8m last year. And the company’s schools and hotels business generated Dh368.6m for the three quarters this year compared with Dh247.6m in the same period a year earlier. More info

Convertible Islamic debt sold by Dana Gas PJSC and Aldar Properties PJSC are headed for the best quarter in a year, a sign the Persian Gulf market is reviving.

The yield on the 5.767 percent sukuk due November 2011 issued by Aldar, Abu Dhabi’s biggest real-estate developer, was 7.30 percent, after falling below 10 percent on Aug. 17. Photographer: Matilde Gattoni/Bloomberg

Dana Gas’s 7.5 percent bonds due October 2012 yielded 10.77 percent yesterday, down from 13.6 percent on June 30, according to data compiled by Bloomberg. The United Arab Emirates energy company has operations in Egypt and Iraq. The yield on the 5.767 percent sukuk due November 2011 issued by Aldar, Abu Dhabi’s biggest real-estate developer, was 7.30 percent, after falling below 10 percent on Aug. 17.

The combination of plunging yields in developed markets and a successful restructuring of state-owned Dubai World’s $14.4 billion of debt may spur more gains, said Holinger Asset Management and DWS Investments GmbH, which hold Dana Gas and Aldar sukuk respectively. Islamic debt is typically backed by assets because the religion bars payment of interest.

“You still get nice yield pick-up in Dana Gas plus some potential upside on the equity option,” Tobias Bettkober, who helps manage $400 million at Holinger in Zurich, said in an interview yesterday. “In terms of yield, we suddenly got a flat world, meaning 5 percent is the new high yield.”

U.S. non-investment grade bond yields averaged 8.49 percent yesterday, down from 9.18 percent on June 30, according to Bank of America Merrill Lynch’s U.S. High Yield Master II Index. Two- year Treasuries yielded 0.50 percent.

Restructuring Progress

The average yield on sukuk sold by Gulf Cooperation Council borrowers fell 25 basis points last month to 6.52 percent, according to the HSBC/NASDAQ Dubai GCC US Dollar Sukuk Index. It reached 8.76 percent on Dec. 11 after Dubai companies announced plans to restructure debt in November.

Kuwait’s Investment Dar Co., owner of half of Aston Martin Lagonda Ltd. was the first company from the region to default on a sukuk, in April 2009. International Investment Group KSCC, a Kuwaiti finance company, missed a payment this April on convertible notes maturing 2012.

Bonds of Nakheel PJSC, a real estate unit of Dubai World, rallied this year as it offered sukuk to pay contractors as part of its debt restructuring plan. The yield on Nakheel’s 2.75 percent $750 million Islamic notes due in January fell 88 basis points to 14.69 percent last week, according to prices compiled by Bloomberg.

“Bonds have been recovering nicely post Nakheel restructuring,” Skander Chabbi, who manages 3.7 billion euros ($4.8 billion) of bonds at DWS Investments in Frankfurt, said in a Sept. 1 interview.

Best Quarter

Sukuk returned 1.4 percent last month, according to the HSBC/NASDAQ Dubai US Dollar Sukuk Index, while debt in developing nations gained 2.4 percent, EMBI Global Diversified Index showed. The spread between the average yield for sukuk and the London interbank offered rate narrowed 16 basis points to 385 in August. It was at 377 basis points yesterday.

Global sukuk sales fell 12 percent from a year earlier to $10.3 billion so far in 2010, according to data compiled by Bloomberg. Gulf issuance dropped 24 percent to $2.47 billion. Sales of Islamic and non-Islamic dollar-denominated convertible debt in the Gulf jumped 56 percent to $3.86 billion this year, versus $1.66 billion in all of 2009, the data show.

Dana Gas

Bonds of Sharjah-based Dana Gas returned 8 percent since June 30, the most since the end of last September, even though the company’s share price is below the conversion price of the securities.

Investors may exchange $10,000 face value of Dana Gas sukuk for 19,076.68 shares in the company, or a conversion price of 1.926 dirhams each. The stock has risen 23 percent this quarter to 0.81 dirham, trimming 2010’s decline to 4.7 percent.

Returns on some Gulf debt “are relatively attractive given the implosion in the U.S. and Europe bond yields,” Bettkober said. “Dana Gas, for one, is backed by oil and gas assets.”

The company, which discovered its fourth gas field this year in the Nile Delta, is “undervalued” and may triple in two years, depending on success in Kurdistan and Iran operations, said Bobby Sarkar, an analyst at NBK Capital in Kuwait.

Aldar’s convertible sukuk gained 4 percent since June 30. While bondholders are unlikely to convert with its stock at 2.37 dirhams versus a conversion price of 5.69 dirhams, investors are banking on government support for full redemption at maturity. The company is 19.2 percent-owned by state-backed investor Mubadala Development Co.

“The chances that Aldar will honor its debt commitments is 100 percent,” Majed Azzam, a real-estate analyst at HC Securities in Dubai, said in a Sept. 2 phone interview. “The form of government support is uncertain. Investors are concerned about potential equity dilution.”

To contact the reporters on this story: David Yong in Singapore at dyong@bloomberg.net; Khalid Qayum in Singapore at kqayum@bloomberg.net.

ABU DHABI — The New Souk which will form part of the Central Market project of Aldar Properties in Abu Dhabi will be opened in the middle of this year.

The souk which will have a ‘letable area’ of 15,000 square meters and would house about 300 shops retailing all items that are being sold at traditional Arabian souks, Fred Douglas, Director of Leasing, Aldar Properties, disclosed at a news conference here on Monday.

He said nearly 90 per cent of the space in the souk had already been rented out.

The Emporium which will form the second component of the Central Market would be opened in fourth quarter of next year while the third component which would comprise of a residential tower and an office tower would be opened 
towards the end of 2012.

The residential tower would have 88-floor and 85,000 square meters of  ‘letable area’ while the 60-storied office building will have an area of 72,000 square meters, Douglas said.

We have reached the top floors in construction and when completed they are likely to be the tallest towers in Abu Dhabi city, he said.

The Aldar officials however declined to disclose the estimated cost of 
the project.

Meanwhile, Aldar Properties and Retail Arabia International have signed a 10 year lease agreement that will see the development of the region’s first House of Fraser store at the Central Market House of Fraser will be the anchor store for Emporium, which will have an area of 62,000 square meters for letting out. Set to become Abu Dhabi’s high fashion destination, Emporium will feature 150 chic boutiques, offering a blend of local international brands, as well as food and beverage outlets over eight levels of cool spacious arcades diffused with natural light and greenery.

House of Fraser have will occupy about 10,000 square meters area of Emporium, Nabil Daud, Managing Director and Chief Executive Officer, Retail Arabia International, said.

ramavarman@khaleejtimes.com

UAE. An environmental awareness advertising campaign devised by Aldar Properties, Abu Dhabi’s leading property development investment and management company has been recognised at the Dubai Lynx Advertising Awards.

The “Save the Environment” campaign, a local internal communications exercise aimed at increasing awareness on how to be eco-friendly and preserve the environment within the workplace, received three awards at the annual regional advertising awards, which are part of the Dubai International Advertising Festival, first launched in 2007.

The three awards received were:

• Gold Lynx award – Print Craft Category – Best use of illustration
• Silver Lynx award – Outdoor – Public Service
• Bronze Lynx award– Print Craft – Best use of art direction

Ousama Ghannoum, Aldar’s Director of Marketing and Media, praised the awards as further endorsement of Aldar’s commitment to sustainability and the preservation of the environment.

“In the privacy of their own cubicles, employees tend to neglect the little efforts they can make that could positively impact the world.

Thus a series of posters, stickers, screen-savers and desktop wallpapers were created and placed in strategic places around the office, to act as constant triggers for employees to take conscious voluntary action and change their habits in the workplace.”

The creative content of the campaign was produced in conjunction with JWT Dubai, Aldar’s lead advertising agency.

Aldar Properties and Retail Arabia International have signed a 10 year lease agreement that will see the development of the region’s first House of Fraser store at Central Market in Abu Dhabi. House of Fraser will be the anchor store for Emporium.

Set to become Abu Dhabi’s high fashion destination, Emporium will feature 150 chic boutiques, offering a blend of local international brands, as well as food and beverage outlets over eight levels of cool spacious arcades diffused with natural light and greenery.

Central Market is a high-end and fully integrated mixed-use redevelopment located at the original commercial district in the heart of downtown Abu Dhabi. In addition to Emporium, Central Market will be home to a traditional Arabian Souk featuring carefully selected independent retailers, and three ultra-modern towers providing apartments, grade A office space, and superb hotel accommodation at the heart of the city.

Nabil Daud, Managing Director and CEO, Retail Arabia International, said:
“The signing of House of Fraser for the Middle East marked a very important step for Retail Arabia International. It is with great excitement that we look to launching this iconic brand in Abu Dhabi as the anchor to the Emporium, Central Market.

We believe that this mall will become a major shopping destination in Abu Dhabi due to its prime location, unmatched design and retail offering.

We very much look forward to working with Aldar on this and future projects and will always strive towards providing customers with the best possible shopping experience”.

Fred Douglas, Director of Leasing, Aldar Properties, added:
“We are delighted to welcome House of Fraser to Emporium at Central Market, our high fashion destination. Aldar is committed to bringing world class retailers and unique concepts to our developments, and is looking to form strategic relationships with groups such as Retail Arabia International to achieve this.”

Dewan Architects and Engineers, one of the region’s leading architectural and engineering consulting firms, has been appointed by Aldar Properties PJSC, Abu Dhabi’s premier real estate development, management and investment company, to design a new world-class education facility that will be part of Aldar Academies, a wholly-owned subsidiary of Aldar Properties.

Al Bateen Street View.

Dewan’s scope is to develop the architectural and engineering design, the concept of which was designed by a Singaporean firm, and provide onsite post contract supervision services. The new school, which will replace an existing structure, is in line with Aldar Academies’ strategic mission to create sustainable educational spaces that offer superior aesthetics and information and communications technologies, and provide world-class educational facilities within a stimulating and secure environment.

Says Mohamed Al Assam, Founder, Chairman and Managing Director of Dewan Architects & Engineers:

“There is a growing demand for high quality educational establishments in Abu Dhabi and the UAE – a need that is being proactively addressed by Aldar Academies. We are proud to form part of this project, and endeavour to provide the client with commitment and excellence to ensure a healthy environment for students while supporting the educational process in the emirate.”

“In designing any of our projects, we are always fully conscious of the need to design buildings that are sustainable by reducing the negative impact of these buildings on the environment. Once complete, this three-storey building will be a leading example of the high quality, high performance buildings that are built with the environment in mind, another milestone in Dewan’s pursuit of delivering buildings that are high in aesthetics and sustainable,” he added.

The school will be located in the Al Bateen area in Abu dhabi and will cater to 1,200 students from Y7 to Y13, with a wide range of classrooms, labs, shared common spaces, home economics facilities, a multi-material workshop, music classrooms, drama studios, an indoor swimming pool, a multipurpose hall, a performance hall, an educational courtyard (oasis), administration facilities and outdoor sport facilities.

Dewan Architects & Engineers is a regional architectural and engineering design firm with offices in the UAE, Saudi Arabia, Iraq, Qatar, and Manila and with over 25 years of industry successes across GCC countries, Africa, Asia and the Middle East. The firm, which employs over 300 professionals, was ranked the 60th largest architectural firm globally, and the 5th largest in the region, by Building Design Magazine’s January 2010 issue, which featured the magazine’s annual ‘World Architecture Top 100′ – a unique, definitive listing of the world’s largest architecture practices.