Aldar Properties PJSC, a developer and landlord based in Abu Dhabi, United Arab Emirates, is preparing to enter the Saudi Arabian and Egyptian markets, CFO Greg Fewer said during a first-half earnings call.
The company is in discussions with local partners in both markets, and the process is "one step beyond the preliminary," Fewer said.
Aldar, which has an investment property portfolio worth about 17 billion dirhams, has until now focused its development and asset management business on the UAE, particularly the emirate of Abu Dhabi.
"We think Saudi [Arabia], we think Egypt, are very interesting markets," said Fewer. "We're keenly engaged across a number of fronts there."
Saudi Arabia and Egypt are among the largest markets in the Middle East. Saudi Arabia has a population of more than 30 million and is the world's largest oil exporter.
Egypt has fewer fossil fuel resources than its neighbors in the Persian Gulf, but it is the Middle East and North Africa region's largest country in terms of population, with almost 100 million citizens. Both Egypt and Saudi Arabia have a very young demographic, meaning demand for residential and commercial property is likely to soar in the coming years.
Fewer said that entry into either market for Aldar was likely to happen with a local partner, a "very important" factor in countries such as Saudi Arabia and Egypt.
"The management teams have been spending a lot of time there, assessing the situations, getting to know those markets, confirming our general views on the markets and hypothesis around which makes sense for us, in which our skill sets and balance sheet really complements, and we'll be [providing updates] as early discussions develop further," said Fewer.
Aldar announced an increase in gross profit for the first half of 2019 of 2% year over year to 1.39 billion dirhams from 1.36 billion dirhams.
Net profit for the first half came in at 969 million dirhams, marking a 13% year-over-year decline that was attributed primarily to legacy one-off income events in the year-ago period.
As of Aug. 8, US$1 was equivalent to 3.67 dirhams.