Aldar will continue management and operation of projects
Aldar Properties PJSC announced unit sales, asset transfers and reimbursements with the Government of Abu Dhabi last week for a total consideration of AED 16.8 billion.
The Government of Abu Dhabi has purchased 760 three-, four- and five-bedroom units within the Al Bandar, Al Zeina and Al Muneera developments in Al Raha Beach for AED 3.5bn. Aldar retains ownership of the remaining inventory at Al Raha Beach, which are available for purchase or “rent-to-own”.
In line with previous agreements with the government, in relation to Yas Island, it has agreed to reimburse Aldar AED 5bn towards certain existing and to be completed infrastructure assets at Al Raha Beach. This amount will be settled by the immediate retirement of AED 5bn towards the currently outstanding infrastructure loan from the Government of Abu Dhabi.
Finally, the Government of Abu Dhabi tasked Aldar with the redevelopment of part of Abu Dhabi’s city centre in 2005, known as Central Market. In line with previous transactions relating to strategic assets, existing assets of Central Market and its associated infrastructure have been sold to the Government for AED 5.7bn.
Aldar will be responsible for the construction management and supervision of the completion of the project as well as the immediate operation and management of the facilities and tenant relations on behalf of the Government of Abu Dhabi.
Fitch Ratings this week said that the support extended to Aldar by the Government demonstrates that contingent liabilities remain a risk to Abu Dhabi’s balance sheet. But the emirate will not be subjected to as severe a strain as in 2008 and 2009, when its strong balance sheet enabled it to deal with such contingencies, despite much lower oil prices than today.
While Moody’s said that the announced agreement is credit-positive for Aldar, as the deal alleviates its concerns relating to the property developer’s 2012 debt maturities, as expressed in the rating agency’s credit opinion of September 2011.
