Aldar’s CEO Mohamed Khalifa Al Mubarak on building the future of the UAE

Since listing on the stock exchange back in 2005, Aldar has been a key component in the growth of Abu Dhabi. What role has the company played in making the emirate what it is today, and how do you measure its success as a transformative influence?

“Our business has changed enormously since listing, in much the same way Abu Dhabi has. There has been massive investment into Abu Dhabi as a destination to live and work, but also to visit. Aldar has embraced all aspects of this. We are a key partner in this transformation across all areas: residential, commercial, leisure and retail. Abu Dhabi is intent on becoming a destination of choice for businesses and tourists – we are helping to deliver that.

“We take great pride in building highly desirable destinations and communities such as those on Yas Island, Al Raha Beach and Shams Abu Dhabi. Our very own Aldar HQ is one of Abu Dhabi’s most iconic structures. The development of Aldar’s assets and their influence on Abu Dhabi’s skyline are symbolic of both the company’s and Abu Dhabi’s progress. We see that journey continuing.”

Read: Abu Dhabi’s Aldar Properties Q2 net profit up 9.7%

Shortly after its launch, Aldar was forced to navigate the choppy waters of the global financial crisis. How did the company make it through and what measures have been put in place to protect the company from future economic shocks?

“We are definitely operating in a more mature market than eight or nine years ago. Since then our asset base has changed: it has grown, but it has also stabilised.

“Our capital structure is very different to what it was, and we are now at a point where debt is at levels we are comfortable with and of investment grade standard. Cash on our balance sheet gives us a lot of flexibility to manage and add to our asset base in more ways.

“Keeping abreast of market dynamics has been essential. Having a deep knowledge of our customers and their aspirations has allowed us to sell the right properties to the right people, at the right time. A healthy balance sheet and strong fundamentals give us confidence in periods of uncertainty.”

How strong is the real estate market at present? Have developers, management companies and investors been hit hard by oil price fluctuations and global conditions?

“We believe the fundamentals of the Abu Dhabi real estate market remain robust. While there are signs that a lower oil price is impacting some parts of the economy, crude prices have never been a determining factor in setting Aldar’s strategy. It’s important to maintain a long-term perspective.

“Foreign direct investment into Abu Dhabi is expected to increase steadily and the strong response to our recent sales events for Mayan, Meera, West Yas, and Yas Acres confirms this view.

“What we have seen is a flight to quality among real estate purchasers in Abu Dhabi, which is driving demand for preferred locations within the Emirate.

“The introduction of a new real estate law at the beginning of 2016 in Abu Dhabi and its subsequent implementation has also helped create a more stable and professional property market for owners, tenants, developers, and investors. Enhancing industry standards will create an even more attractive real estate investment proposition that benefits everyone.”

Read: Aldar says phase one of Yas Acres sold out for Dhs 1bn

Yas Island is perhaps Aldar’s best known and most high profile development. What is next for the Island?

“Yas Island has firmly established itself as a world class entertainment and leisure destination that spans the Yas Marina Circuit which is host to the Formula 1 Grand Prix, F1 track, the Ferrari World theme park, Yas Waterworld, Yas Viceroy, Yas Mall and the Yas Links Golf Club. However, Yas Island continues to evolve into something more with the addition of residential offerings.

“In April, we announced the launch of Yas Acres, a Dhs 6bn golf and waterfront development including 1,315 villas and townhouses. This is one of the most significant new developments we have launched and one that delivers a complete lifestyle destination. Initial sales have proved strong.

“In addition to Yas Acres, our residential development projects on Yas Island include West Yas, Ansam, and Mayan. All of these are key elements in Yas Island’s role in shaping the new Abu Dhabi.”

How concerned are you with the new theme parks opening in Dubai? Are you worried they will dilute the popularity of Ferrari World?

“I believe there is significant opportunity in this market for multiple players, especially given the size of the industry and its rate of expansion. It is worth noting that analysts at Euromonitor expect that the Yas theme parks, along with all those being developed in Dubai, could generate around $837m in revenue for the UAE in 2019. Having so many theme parks within a short driving distance of each other just increases the worldwide appeal of the UAE as a leisure and entertainment hub.”

You have held your current role as CEO for about two years. Are you pleased with the impact you have made?

“The progress we have made in becoming the most trusted and recognised real estate lifestyle developer in Abu Dhabi is a source of great pride. It’s particularly satisfying seeing each component of this vision implemented and activated. Being trusted to help shape the urban fabric of the UAE capital is a great honour.

“We are a proud contributor to the economic development of Abu Dhabi. Since inception, we have worked alongside the government of Abu Dhabi, often acting as the voice of the private sector. A good example of this partnership in action was our involvement in the establishment of the real estate law. This all helps create a business environment that facilitates innovation, collaboration and prosperity.
“Another notable achievement has been our success in building a more mature and stable business. The quality of Aldar’s earnings has improved significantly over the past two years and we are now firmly committed to delivering true shareholder value.”

As well as CEO of Aldar you are chairman of several groups including Abu Dhabi Tourism and Culture Authority, Miral Asset Management, Aldar Academies and Image Nation. How beneficial is it to be able to work between complementary businesses?

“It is a great privilege to have been entrusted to lead such an array of high profile groups. The breadth of work allows a joined up approach that can benefit UAE nationals, residents and tourists alike. It also gives me the opportunity to leverage all of my experience in the broadest sense. I am very lucky to have the opportunity to look out across a city and see so many projects that I have been involved with.”

In terms of real estate and tourism, Abu Dhabi faces tough competition from Dubai. Can the capital compete on these fronts or is it not trying to?

“Firstly, it is important to view the UAE as a destination in itself. The success of one emirate can be enjoyed by all, and benefit the entire country.

“In terms of real estate, you can’t really compare Abu Dhabi’s market to Dubai. The fundamentals of each are very different. For instance, we haven’t seen the same level of rental property oversupply, and consequently price declines in Abu Dhabi that Dubai has experienced so far this year.

“For tourism, I am confident that Abu Dhabi can replicate much of the success that Dubai has enjoyed over the years in attracting vast numbers of visitors. In many ways, the emirates complement each other. In fact, one of my first decisions as chairman of the Abu Dhabi Tourism Authority was to discuss with my Dubai counterpart ways in which we can cooperate more. This makes a sense given Dubai is only a 45 minute drive away.”

Read: Abu Dhabi’s Aldar says 75% of its Mayan project sold out

As the region’s first circular skyscraper, Aldar’s HQ made waves in the world of architecture. How important is it for the company to build talked-about structures and developments?

“We have been involved in some of the emirate’s most memorable and truly iconic developments. We have been entrusted to enrich Abu Dhabi’s skyline and this is a responsibility we take very seriously.

“Developing exciting and innovative projects is part of what makes Aldar what it is. By creating quality, desirable destinations, we are also enriching the lives of Abu Dhabi residents as well as tourists to the emirate.”

What comes next for Aldar, both in the short-term and the long-term?

“Despite some macroeconomic headwinds, the core Abu Dhabi market we operate in remains stable and mature. And in line with our stated development guidance, we look for a launch cycle of around 1,500 units a year.

“For now, we are 100 per cent committed to Abu Dhabi. Once we have proved ourselves here, only then would we consider exploring international markets further afield. It’s important that such a move isn’t made in haste. At the end of the day, if we expand internationally, we are not just taking the name of Aldar, we are also taking the name and reputation of Abu Dhabi as well and this is a key a driver in our decision making process.”

What are your ambitions for the coming years? What challenges do you foresee and how will you rise to meet them?

“These are exciting times for Aldar and Abu Dhabi. Through substantial investment in non-oil industries, the government continues to diversify the economy, helping spur economic growth as well as accelerating private sector job creation. With the economy expected to expand and Abu Dhabi’s population still growing, the demand for high-quality real estate assets should stay strong.

“I remain convinced that the strategy we have in place at Aldar is the right one. We have a strong pipeline of investments and developments that positions us well for future success.”