DEVELOPMENT MANAGEMENT

Transcription

1 Operational Review DEVELOPMENT MANAGEMENT The principal activities of the development business are property development and development management HIGHLIGHTS Two major off-plan development launches; The Bridges and Water s Edge AED 3.5 billion development sales AED 3 billion construction contract awards during the year 83% sold across all Aldar units launched for sale Close to 7,000 residential units currently under development, 5,000 on Yas Island Commenced handover on completed projects Ansam and Al Hadeel PROPERTY DEVELOPMENT The primary focus of the development business is property development. Aldar s diverse land bank supports a launch sequence throughout the cycle. Aldar has a significant development pipeline in place, that currently provides visibility out to During the year there were two major development launches, The Bridges and Water s Edge. Both developments catered towards to the underserved mid-market segment of residential within Abu Dhabi and witnessed significant buyer interest. DEVELOPMENT MANAGEMENT Further to developing our own land banks and developments, Aldar tenders to project manage third-party developments on a fee basis. There are currently two fee-based projects under development, West Yas on Yas Island and Abu Dhabi Plaza in Astana, Kazakhstan. 22

2 Strategic Report LAND BANK Aldar s land bank includes 75 million sqm of land across the Emirate of Abu Dhabi. This map highlights Aldar s key land bank and projects across Abu Dhabi. Aldar s land bank provides many advantages from a development perspective and creates optionality as to how and when land is developed. This translates into a strong development pipeline that can mitigate the different phases of Abu Dhabi s perpetual real estate cycle meaning that we expect development opportunities throughout the cycle. Land bank split 75 million sqm Destinations 14% Abu Dhabi Island 9% Abu Dhabi other 77% Destinations approved GFA 6 million sqm Yas Island 65% Al Raha Beach 18% Reem Island 17% Sales performance (AED BN) Al Sila a Tilal Liwa Hotel AL AIN Seih Sdeirah Alghadeer GHANTOOT Boutik Al Ain Al Oyoun Village Al Ghuraiba Al Naqla Shabhat Plaza Al Jimi Mall Al Jimi Mall Extention Remal Mall Completed Developments Developments in Progress Land Bank Lulu Island Burj Mohammed Bin Rashid and World Trade Center Abu Dhabi Khalidiya Village Nareel Island Tala Tower Baniyas Towers Al Mashtal Al Bateen Park Al Gurm REEM ISLAND Sun and Sky Towers Boutik Sun and Sky The Gate & Arc Towers Boutik Gate Meera Bridges Al Mamoura Al Murjan Tower North Park Imperial College London Diabetes Centre Sas Al Nakhl AL RAHA BEACH HQ Building Al Muneera Al Zeina Al Bandar Al Hadeel Al Raha Beach West Al Raha Gardens and Gardens Plaza Watani Al Rayyana Golf Gardens Injazat Ethihad Plaza Al Merief Masdar Abu Dhabi Aviation Complex Al Ajban YAS ISLAND Ferrari World Abu Dhabi Yas Marina Circuit Yas Links Yas Viceroy Yas Marina and Yacht Club Yas Water World Yas Mall Ikea Ace Hardware big box retail Yas Plaza Hotel Ansam West Yas Mayan Yas Acres Water s Edge Al Falah Shamkha Motor World 23

3 Operational Review continued DESTINATION DEVELOPMENT As the master developer, Aldar is responsible for the long-term vision and development of these land banks. Bringing in third-party developers to support this vision reduces our long-term destination development risk and widens the array of products for end-users and investors. YAS ISLAND 30km outside of Abu Dhabi downtown, in the direction of Dubai Key completed assets include the Yas Marina Circuit, Ferrari World, Yas Waterworld and Yas Mall Close to 2,000 hotel keys currently on Yas Island, all part of asset management portfolio Major tourism projects currently under development including Warner Bros World Abu Dhabi theme park and Seaworld Abu Dhabi, set for completion in 2018 and 2022 respectively New twofour54 media and entertainment free-zone that will initially bring approximately 5,000 working professionals onto Yas Island 5,000 residential units under development across five projects including West Yas, Mayan, Yas Acres, Water s Edge and recently completed Ansam will support significant population growth over the coming years 24

4 Strategic Report REEM ISLAND High-rise urban living within close proximity to downtown Abu Dhabi Two major completed projects include the Sun & Sky Towers, which offers a mix of residential and office space, and the 3,500 residential unit Gate Towers and The Arc 1,700 units under development across two projects; Meera and The Bridges AL RAHA BEACH A premium residential destination, running along the waterfront Close-proximity to the main highway links into Abu Dhabi and Dubai as well as the Abu Dhabi International Airport and Yas Island Over 3,000 units completed across four developments including, Al Bandar, Al Muneera, Al Zeina and the recently completed Al Hadeel 25

5 Operational Review continued DEVELOPMENT PIPELINE COMPLETED Ansam Type: Prime residential apartments Location: Yas Island Units launched: 547 Sold*: 93% * % sold as at 31 Dec 2017 COMPLETED Al Hadeel Type: Prime residential apartments Location: Al Raha Beach Units launched: 233 Sold*: 93% EXPECTED COMPLETION: 2018 Al Nareel Type: Exclusive land plots for villa development Land: Non-investment zone Location: Nareel Island, off Abu Dhabi Island Units launched: 148 Sold*: 59% EXPECTED COMPLETION: 2018 Al Merief Type: Land plots for villa development Land: Non-investment zone Location: Khalifa City Units launched: 281 Sold*: 100% 26

6 Strategic Report EXPECTED COMPLETION: 2018 Meera Type: Residential apartments Location: Reem Island Units launched: 408 Sold*: 91% EXPECTED COMPLETION: 2020 The Bridges Type: Mid-market residential apartments Location: Reem Island Units launched: 636 Sold*:93% EXPECTED COMPLETION: 2019 Mayan Type: Prime residential apartments Location: Yas Island Units launched: 512 Sold*: 81% EXPECTED COMPLETION: 2018 West Yas Type: Villa development Location: Yas Island Units launched: 1,017 Sold*: 71% EXPECTED COMPLETION: 2019 Yas Acres Type: Villa and townhouse development Location: Yas Island Units launched: 652 Sold*: 66% EXPECTED COMPLETION: 2020 Water s Edge Type: Mid-market residential apartments Location: Yas Island Units launched: 1,236 Sold*: 79% 27

7 Operational Review continued ASSET MANAGEMENT The principal activities of the asset management business are predominantly based around four key real estate asset classes: residential, retail, office and hotels HIGHLIGHTS AED 1.6 billion net operating income guidance met Resilient occupancy performance across all key asset classes Investment plan increased to AED 5 billion from AED 3 billion Completion of Repton School Acquisition of International Tower office building completed in December 2017 RESIDENTIAL The residential asset management portfolio includes 4,800 residential units across 10 completed Aldar developments. The residential portfolio includes a wide array of high-quality units ranging from studio apartments to 5-bed villas. This has allowed the portfolio to appeal to a wide spectrum of the market, with emphasis on high-quality developments with good amenities. All of the units are located within Abu Dhabi, with a concentration of units positioned between Reem Island and Khalifa City. Residential unit split Studio 7% 1 bed 30% 2 bed 32% 3 bed 21% 4 bed+ 10% 28

8 Strategic Report The residential portfolio has experienced significant growth over the last five years with the completion and subsequent handover of two major residential developments in 2014, Al Rayyana and The Gate Towers, each adding approximately 1,500 units to the portfolio. As at 31 December 2017, two projects under development will support additional growth in the portfolio. The Bridges and Water s Edge will expand Aldar s offering to provide a high quality mid-income positioned rental product with the latter also bringing capacity onto Yas Island. The residential strategy has focused on diversifying the tenant mix between individuals, which can be renewed annually and multi-year bulk tenancy agreements with corporates. As at 31 December 2017, bulk deals represented 36% of the units in the portfolio. Occupancy performance of the residential portfolio has been supported by continued demand for high-quality, residential properties that also provide a diverse offering of amenities. As at 31 December 2017, residential occupancy across the portfolio stood at 91%. Residential location split Residential unit evolution Residential lease split Al Raha Beach 5% Reem Island 39% Abu Dhabi Island 8% Abu Dhabi mainland 45% Al Ain 3% ,800 1,800 3,000 4,800 4,800 4, Residential portfolio Individual 64% Bulk 36% Additions Under development 29

9 Operational Review continued RETAIL Our retail portfolio includes 470,000 sqm gross leasable area (GLA) across 25 assets within the Abu Dhabi metropolitan area and Al Ain. The retail strategy is split between community retail, which offers residents key amenities such as supermarkets and restaurants, as well as destination retail, which provides a much broader retail and entertainment offering. The community retail predominantly includes on-site convenience retail, based around many of Aldar s residential communities. Destination retail includes Aldar s two largest retail assets, Yas Mall and Al Jimi Mall. Other retail incorporates our big box retail on Yas Mall, which includes an IKEA and an Ace Hardware. The main addition to our retail portfolio in recent years was the handover of Yas Mall in As at 31 December 2017, the AED 400 million 30,000 sqm GLA expansion of Al Jimi Mall was still under construction, with completion set for H YAS MALL Yas Mall is the flagship asset in the retail and asset management portfolio. Yas Mall is located in the centre of Yas Island, within close proximity of the key leisure and entertainment offerings on the island. Opened in November 2014, Yas Mall lifted the Abu Dhabi retail offering with the first true super-regional mall experience in the Emirate. The mall has now completed three years of trading and occupancy stands at 94% as at 31 December Yas Mall retail split Anchors 46% Major space users 22% Large space users 8% Line shops 19% F & B 5% Retail type split Retail location split Retail GLA evolution ( 000 sqm) Yas Mall remaining lease length Destination 56% Community 27% Other 17% Yas Island 55% Reem Island 7% Al Raha Beach 4% Abu Dhabi 14% Al Ain 20% Retail portfolio 0 3 years 48% 3 5 years 13% 5+ years 39% Additions Under development 30

10 Strategic Report OFFICE Our office portfolio includes over 240,000 sqm GLA, predominantly focused around Grade A office building space. The office portfolio is predominantly leased on a long-term basis to government and government related entities (GRE), which is representative of the Abu Dhabi commercial office tenant market. Leases to corporate tenants represent approximately 20% of the total GLA. The commercial strategy is to maintain high-quality commercial space and build long-term relationships with tenants. As at 31 December 2017, the average tenure of remaining leases was approximately 5 years. The majority of our commercial portfolio is high-quality Grade A and Grade B space. The office portfolio is predominantly based on Abu Dhabi Island. The acquisition of 39,000 sqm GLA International Tower was also completed in December Office occupancy stood at 88% as at 31 December 2017, including the recently acquired International Tower (68% occupancy as at 31 December 2017). Commercial tenant split 1 Office type Commercial GLA evolution Government/GRE 75% Corporate 17% Vacant 8% Grade A 65% Grade B/Other 35% Office portfolio Acquired 1 Excluding International Tower Office remaining lease split Office location split 0 3 years 39% Al Raha Beach 20% 3 5 years 37% Abu Dhabi Island 75% 5+ years 24% Shams Abu Dhabi 5% 31

11 Operational Review continued HOTELS Our hotel portfolio includes 2,536 keys across nine hotels and serviced apartments across the Emirate of Abu Dhabi. The hotel portfolio includes a broad range of product offerings including 5-star, 4-star, 3-star hotel rooms and serviced apartments. The 4-star hotels constitute almost half of the portfolio by number of keys. With 90% of our hotel keys located on Yas Island, our core strategy remains focused on continued activation of the island through major events and promotion, working alongside the relevant bodies to achieve this strategy. Aldar does not operate the hotels, instead employing reputable international operators through hotel management agreements (HMA) to manage the day-to-day operation of the assets. These HMAs include certain performance metrics to align the interests of the operators to those of the asset owners to encourage performance. Hotel occupancy for 2017 full year was 78% (2016: 77%), ahead of the wider Abu Dhabi market of 72%. Hotel occupancy 78% (2016:77%) Hotels type split by keys Hotels location split by keys 5 star 20% 4 star 49% 3 star 18% Serviced 13% Yas Island 90% Abu Dhabi Island 5% Other 5% 32

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