Al Dar posts huge profits

The largest developer in Abu Dhabi was able to post record gains primarily through a very healthy amount of property sales.

Aldar is the largest property developer in the Emirate of Abu Dhabi, and it is the second largest property developer in the United Arab Emirates. Earlier this week, the company was able to announce a record breaking fourth quarter for profits as rising land prices made their property sales in that quarter extremely profitable transactions.

The total net income for Aldar during the fourth quarter of 2007 was AED 531 million, which represents a profit margin increase of 23% from the previous quarter. In addition to that very impressive quarterly profit number, the overall profit for the 2007 year rose over 55% from 2006, finally coming to a halt at just below the AED 2 billion mark.

The main reason for the prosperity of the company has to do with the revenue accrued from the sale of residential housing units as the rapid inflation of prices in the United Arab Emirates and particular in Abu Dhabi greatly helped the property development company. Not only did land they control increase very quickly in value during 2007, but they were able to develop that land and sell it off for amounts that were well above the costs of the labour and materials that the company was required to pay.

In a recent conversation with the Chief Financial Officer of Aldar, ArabianBusiness.com was able to report that the feeling by the Aldar brass is that the company has reached a new level in terms of market viability and they are now ready to expand operations and create new opportunities for jobs and property expansion under the umbrella of the state-owned corporation.

The time certainly appears to be right for expansion in the Abu Dhabi housing market, as prices continue to rise even in spite of regulatory measures taken by the government to cap rental increases. Property development is very much still on the rise in the UAE territories and opportunities for foreign and domestic property investment are still some of the best around.

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