ALDAR INVESTOR DAY 22 APRIL 2018
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SPEAKERS TALAL AL DHIYEBI Chief Executive Officer DAVID DUDLEY ED Investments & Partnerships MAAN AL ALWAQI ED Commercial RAMY ZAGHLOUL ED Development JAHED RAHMAN ED Acquisitions & Investment Management GREG FEWER Chief Financial Officer 2
AGENDA 9am 9:30am 9:35am 10am 11:40am 12pm 12:30pm 2pm Breakfast Welcome address Abu Dhabi macro update Aldar management presentations Q&A Lunch Depart for optional 1-hour Louvre Abu Dhabi tour (starting at 1245pm) Depart for optional 30-min Warner Bros Abu Dhabi site tour (starting at 230pm) 3
REAL ESTATE MARKET OVERVIEW David Dudley Executive Director Investments & Partnerships 4
MACRO TRENDS Oil price (USD per barrel) 140 Brent Spot Price 120 100 80 60 40 20 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Market downturn Market upswing Market downturn Recovery Reaching bottom of the cycle with recovery driven by return of government spending and stabilisation in oil prices Source: US Energy Information Administration & OE forecasts 5
RESIDENTIAL MARKET RENTS Residential Supply Residential Rents Residential Supply and Rents 260 250 122 133 150 163 159 140 133 180 160 140 240 120 230 220 238 246 247 250 256 256 100 80 60 210 200 226 2012 2013 2014 2015 2016 2017 2018F Residential Supply (000's) Residential Rents (000's) 40 20 - Opportunities remain for mid-income housing and upgrading to high quality communities; market recovery in sight Source: JLL 6
RESIDENTIAL MARKET SALES Residential Supply Residential Rents Residential Supply and Sales Prices 260 250 240 10,450 11,850 15,250 16,000 15,050 13,150 11,800 18,000 16,000 14,000 12,000 230 220 238 246 247 250 256 256 10,000 8,000 6,000 210 226 4,000 2,000 200 2012 2013 2014 2015 2016 2017 2018F Residential Supply (000's) Residential Sales (Price / sqm) - Opportunities remain for mid-income housing and upgrading to high quality communities; market recovery in sight Source: JLL 7
OFFICE MARKET Office Supply Grade A and B Rents (AED per sqm) Office Supply & Grade A & B Rents 4,500 2,000 4,000 1,800 3,500 1,600 3,000 2,500 2,000 1,500 1,000 3,416 3,610 3,611 3,743 3,954 4,133 4,133 1,400 1,200 1,000 800 600 400 500 200-2012 2013 2014 2015 2016 2017 2018F - Office Supply (000s) Grade A Rents (AED per sqm) Grade B Rents (AED per sqm) Prime office sector remains stable; opportunities for niche offerings and build to suit Source: JLL 8
RETAIL MARKET Retail Supply - 2012-2018F (000s sqm GLA) 2,662 1,993 2,156 2,493 2,511 2,482 2,508 2012 2013 2014 2015 2016 2017 2018F Retail supply continues to increase; selective opportunities remain Source: JLL 9
HOSPITALITY MARKET Hospitality Supply (000s keys) Passenger Arrivals Hotel Supply & Passenger Arrivals (2012-2017) 35 25 30 20 25 20 15 15 10 10 5 21 23 25 26 28 29 5-2012 2013 2014 2015 2016 2017 Hospitality Supply (000s) Passenger Arrivals (000s) Opportunities for 3-4 star hotels and serviced apartment product in established locations - Source: JLL& Abu Dhabi Airports Company 10
DELIVERING DESIRABLE DESTINATIONS Talal Al Dhiyebi Chief Executive Officer 11
OBJECTIVES FOR TODAY o Aldar today o Review recent announcements o New disclosures o New operating model and corporate structure o Shareholder returns 12
ALDAR AT A GLANCE o Master developer across key investment zone locations in Abu Dhabi o Significant land bank and approved GFA in place o Large and diverse asset management portfolio o Committed to shareholder returns o Primed for growth today 13
OUR STRATEGY Create long-term shareholder value Our vision: delivering desirable destinations Development Asset Management Monetise land bank Dominant market position Create leading destinations Grow a large and diverse portfolio Be recognised as landlord of choice Proactively recycle capital 14
2018 SO FAR New operating model Strategic partnership with Emaar Diversification outside of Abu Dhabi 2 development launches 15
DEVELOPMENT SALES INSIGHTS Maan Al Awlaqi Executive Director Commercial 16
SALES DEMOGRAPHICS 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Al Hadeel Ansam Meera Mayan Yas Acres The Bridges Water's Edge UAE GCC Arab Western Asia Other 17
RECENT SALES INSIGHTS Strong broker penetration Opening up new market sub-segments Strong new buyer penetration UAE remains top buyer Ticket price key 18
UNIQUE REAL ESTATE OPPORTUNITY o One of the few remaining AA-rated economies o Stability of the UAE o Real estate law in place o Low international penetration o Unique supply-demand drivers o Strategic partnership synergies 19
STRATEGIC PAFRTNERSHIP Ramy Zaghloul Executive Director Development 20
JOINT VENTURE RATIONALE Accelerate growth of development business Diversification outside of Abu Dhabi Entry into the Dubai market with best possible partner Create a regional champion Access opportunities beyond UAE 21
SAADIYAT GROVE Particulars Detail Location Saadiyat Island Type Mixed-use GDV AED 8 billion Units 2,000 Retail GLA 130,000 sqm Hotels 4 (4-star and 5-star) 22
EMAAR BEACHFRONT Particulars Detail Location Between Palm Jumeirah and JBR Type Residential GDV AED 17 billion Units 7,000 Hotels 1 (5-star) 23
PARTNERSHIP ARRANGEMENTS o MOU signed in March 2018 o Finalising JV structure and governance o AED 25 billion GDV across first two development projects o Focus on national and international opportunities o See interesting opportunities within the region 24
DEVELOPMENT UPDATE Talal Al Dhiyebi Chief Executive Officer 25
DEVELOPMENT STRATEGY Accelerate development pipeline Add diversification in a key global real estate market Expansion beyond traditional destinations Open new segments within Abu Dhabi residential market 26
DEVELOPMENT OVERVIEW Property Development Development Management Significant land bank and approved GFA in place Strategic partnership with Emaar Strategic partner of Government of Abu Dhabi Destination development Explore opportunities beyond traditional market Public-Private Partnerships (PPPs) Opportunistic land sales Dominant market position Fee-based development management 27
ABU DHABI MAP Seih Sdeirah Saadiyat Island Yas Island Lulu Island Reem Island Al Raha Beach 28
DESTINATION YAS ISLAND Yas Acres Land bank 5,000 residential units under development twofour54 media and entertainment free-zone West Yas Warner Bros Abu Dhabi opening in July 2018 Yas Waterworld Ansam Yas Mall Water s Edge New Midfield Terminal Ferrari World Yas Links SeaWorld Abu Dhabi Yas Plaza hotels Yas Beach Mayan Yas Marina Yas Marina Circuit Yas Bay district twofour54 Yas Bay 29
ALGHADEER o Alghadeer master plan launched at CityScape Abu Dhabi 2018 o AED 10 billion GDV across 15 year development horizon o Located within Seih Sdeirah land bank 30
DEVELOPMENT PIPELINE EXPECTED COMPLETION: 2018 Nareel Island Type: Exclusive land plots for villa development Land: Non-investment zone Location: Nareel Island, off Abu Dhabi Island Units launched: 148 Sold as at 31 Dec 2017: 59% COMPLETED Ansam Type: Prime residential apartments Land: Investment zone Location: Yas Island Units launched: 547 Sold as at 31 Dec 2017: 93% COMPLETED Al Hadeel Type: Prime residential apartments Land: Investment zone Location: Al Raha Beach Units launched: 233 EXPECTED COMPLETION: 2018 Al Merief Type: Land plots for villa development Land: Non-investment zone Location: Khalifa City Units launched: 281 Sold as at 31 Dec 2017: 100% Sold as at 31 Dec 2017: 93% 31
EXPECTED COMPLETION: 2018 Meera Type: Residential apartments Land: Investment zone Location: Reem Island Units launched: 408 Sold as at 31 Dec 2017: 91% EXPECTED COMPLETION: 2019 Mayan Type: Prime residential apartments Land: Investment zone Location: Yas Island Units launched: 512 Sold as at 31 Dec 2017: 81% EXPECTED COMPLETION: 2018 West Yas Type: Villa development Land: Investment zone Location: Yas Island Units launched: 1,017 Sold as at 31 Dec 2017: 71% EXPECTED COMPLETION: 2019 Yas Acres Type: Villa and townhouse development Land: Investment zone Location: Yas Island Units launched: 652 Sold as at 31 Dec 2017: 66% 32
EXPECTED COMPLETION: 2020 The Bridges Type: Mid-market residential apartments Land: Investment zone Location: Reem Island Units launched: 636 Sold as at 31 Dec 2017: 93% EXPECTED COMPLETION: 2021 Reflection Type: Mid-marker residential apartments Land: Investment zone Location: Reem Island Units launched: 340 Sold as at 31 Dec 2017: n/a EXPECTED COMPLETION: 2020 Water s Edge Type: Mid-market residential apartments Land: Investment zone Location: Yas Island Units launched: 1,236 EXPECTED COMPLETION: 2021 Alghadeer Type: Affordable residential Land: Investment zone Location: Seih Sdeirah Units launched: 611 Sold as at 31 Dec 2017: n/a Sold as at 31 Dec 2017: 79% 33
DEVELOPMENT SUMMARY o Remain market leader for off-plan developments in Abu Dhabi o Emaar JV to boost development pipeline and add diversification o Opening up new destinations across land bank o Expanding product offering through Alghadeer o Current guidance under upward review 34
ASSET MANAGEMENT UPDATE Jahed Rahman ED Acquisitions & Investment Management 35
ASSET MANAGEMENT STRATEGY Diverse and high-quality portfolio Drive value and recycle capital Investment plan in place to grow NOI Abu Dhabi AA-rated with 8% cap rates 36
ASSET MANAGEMENT OVERVIEW Retail Residential Commercial Hospitality Adjacent & other sqm GLA 430,000 units 4,800 sqm GLA 307,000 Hotel keys 2,500 Aldar Academies, Khidmah, OVs, other Book value (31 Dec 2017) Book value (31 Dec 2017) Book value (31 Dec 2017) Book value (31 Dec 2017) Book value (31 Dec 2017) AED 6.9 billion AED 4.9 billion AED 3.3 billion AED 2.1 billion AED 0.6 billion 2017 NOI 2017 NOI 2017 NOI 2017 NOI 2017 NOI AED 0.5 billion AED 0.5 billion AED 0.4 billion AED 0.1 billion AED 0.1 billion 37
RETAIL PORTFOLIO o Existing 430,000 sqm GLA unit strong retail portfolio o Focused around destination and community retail o Near-term value and growth drivers Retail split by type (sqm GLA) 17% o Yas Mall retail mix optimisation o Building out a stronger community retail portfolio o Al Jimi Mall extension 27% 56% Destination Community Other 38
YAS MALL UPDATE o Largest retail asset in Abu Dhabi Footfall growth (millions of visitors) 18 19 20 o Steady growth in footfall over last 3 years o Trading occupancy maintained at 94% during 2017 o Major 3-year renewals process complete o Near-term value and growth drivers 2015 2016 2017 Current Yas Mall split (sqm GLA) o Retail mix o Unit sizing 19% 5% o Destination Yas Island 8% 46% 22% Anchors Large space users Other Major space users Line shops 39
RESIDENTIAL PORTFOLIO o 4,800 unit strong residential portfolio o Diverse mix of units and locations across Abu Dhabi o Flight to quality remains true o Strong occupancy performance o Near-term value and growth drivers o Improvements to community facilities Residential split by type 64% 36% o Strong community retail offering o Building out bulk leasing component Bulk Individual 40
COMMERCIAL PORTFOLIO o Commercial portfolio consolidates office and commercial assets o 307,000 sqm NLA now including o International Tower o NLA Repton School o Incorporation of Motor World and The Wing from retail portfolio o Near-term value and growth drivers o Immediate contribution of recent additions o Asset optimisation 41
HOSPITALITY PORTFOLIO o 2,500 hotel key portfolio o Solid occupancy performance 78% during 2017 o 2017 ADRs under pressure down 11% to AED 390 o Outperforming wider Abu Dhabi market o Near-term value and growth drivers o Abu Dhabi tourism story continuing to strengthen Hotel split by location (keys) 10% 90% o Well positioned across key segments o Cost cutting measures starting to come into effect Yas Island Other 42
ADJACENT PORTFOLIO o Key adjacent portfolio assets o Aldar Academies o Khidmah property and facilities management o Operative Villages o Proactive strategy to look for value accretive opportunities o Near-term value and growth drivers o Aldar Academies capacity roll out o Adjacent business expansion opportunities 43
COMMITTED TO GROWTH o Committed to growth of asset management business o AED 5 billion investment growth plan in place o AED 2.9 billion assets in place or under development today o AED 1.2 billion committed projects at design stage o Continue to assess acquisition opportunities o Maintain diverse asset portfolio across key sectors 44
INTERNATIONAL TOWER o Acquired in December 2017 with 68% occupancy o Proactive strategy to renew and extend leases o Cost saving initiatives underway o Strong international tenant base advantage o Negotiating new leases on c.15% vacant GLA 45
INVESTMENT PLAN COMPLETED IN Q3 2017 Repton School Type: Commercial Location: Abu Dhabi Island GLA: 20,000 sqm ACQUIRED IN Q4 2015 Daman House Type: Commercial office building Location: Abu Dhabi Island GLA: 23,000 sqm ACQUIRED IN Q4 2017 International Tower Type: Commercial office building Location: Abu Dhabi Island GLA: 39,000 sqm COMPLETED IN Q3 2016 Al Mamoura School Type: Aldar Academies school Location: Abu Dhabi Island Capacity: 1,800 student 46
EXPECTED COMPLETION: 2020 Water s Edge Type: Residential Location: Yas Island Units: c.800 DESIGN STAGE Shams Marina Type: Mixed-use Location: Reem Island Overview: Hotel, long-stay apartments and residential EXPECTED COMPLETION: Q4 2018 Al Jimi Mall extension Type: Retail extension to existing mall Location: Al Ain GLA: 33,000 sqm DESIGN STAGE Yas Mall Hotel Type: Hospitality Location: Yas Island Keys: 349 EXPECTED COMPLETION: 2020 The Bridges Type: Residential Location: Reem Island Units: 636 DESIGN STAGE Yas retail park Type: Retail Location: Yas Island GLA: c.10,000 sqm 47
SUMMARY o Proactive asset management growth strategy in place o See opportunities to recycle capital o Investment plan to drive near-term NOI growth o Assessing acquisition opportunities o Expansion options for adjacent business portfolio 48
UNLOCKING VALUE Greg Fewer Chief Financial Officer 49
CAPITAL ALLOCATION Uses Sources Internal External Development net realised profit on handover after dividend Asset management net free cash flow after dividend Debt debt policy in place Equity Development investments 12% WACC Asset management investment plan 8% WACC Shareholder returns dividend policy in place 50
CLEAR DIVIDEND POLICY INPLACE Asset Management business Development Management business Pay-out factor Distributable free cash flow Realised profit Policy Range 65-80% 20-40% Net operating income Upon completion and handover Less: + of developments Methodology/ key drivers Interest expense Maintenance capex Overheads 51
SHAREHOLDER RETURNS Dividend paid (fils/ share) 7 9 10 11 12 2013 2014 2015 2016 2017 o Significant dividend growth over last 5 years o Introduction of formal dividend policy from 2016 o First development dividend component paid as part of 2017 dividend o Upcoming development handovers provides dividend upside 52
NEW CORPORATE STRUCTURE o New structure to prepare development and asset management to operate independently o Separate debt and dividend policies in place o Designed to drive greater operational and capital efficiency o Prepare Aldar for this new phase of accelerated growth, in line with its strategy Aldar Properties PJSC Development Management Asset Management Debt policy Dividend policy Up to 25% LTV (31 Dec 17: 3%) 20-40% realised profit 35-40% LTV (31 Dec 17: 33%) 65-80% distributable FCF 53
CLOSING REMARKS Talal Al Dhiyebi Chief Executive Officer 54
IN SUMMARY New operating model and corporate structure Accelerating development pipeline Asset management strategy to drive growth Focus on shareholder returns Primed for growth 55
APPENDIX 56
DEVELOPMENT SUMMARY Project Location Recognition Launch Total as at 31 Dec 2017 * Expected date Sold Sold unit sales Units % sold Revenue Revenue Revenue completion units ¹ value (AEDm) launched ¹ recognition % recognisedbacklog Ansam Yas Island Over-time 2014 508 852 547 93% 99% 846 Completed 6 in Q4 2017 Hadeel Al Raha Beach Over-time 2014 216 431 233 93% 99% 428 Completed 3 in Q4 2017 Nareel Abu Dhabi Island Over-time 2015 88 1,117 148 59% 84% 937 180 2018 Merief Khalifa City Over-time 2015 281 609 281 100% 60% 363 246 2018 Meera Shams Abu Dhabi Over-time 2015 371 461 408 91% 68% 315 146 2018 Mayan Yas Island Over-time 2015 415 746 512 81% 21% 153 593 2019 Yas Acres Yas Island Over-time 2016 428 1,593 652 66% 10% 158 1,435 2019 The Bridges Shams Abu Dhabi Over-time 2017 593 597 636 93% 22% 134 463 2020 Water's Edge Yas Island Over-time 2017 979 955 1,236 79% 0% - 955 2020 Reflection Reem Island Over-time 2018 n/a n/a 340 n/a n/a n/a n/a 2021 Al Ghadeer Seih Sdeirah Over-time 2018 n/a n/a 611 n/a n/a n/a n/a 2021 Aldar developments 3,879 7,362 5,604 83%² 45% 3,335 4,026 West Yas Yas Island n/a 2015 718 3,222 1,017 71% 2018 Total developments 4,597 10,584 6,621 81%² ¹ Sold units and sold units sales value includes all units where a sales purchase agreement ( contract ) has been signed. This does not include sales reservations and pending sales contracts. Total units and values as at period end are net of cancellations. ² Sold as at 31 December 2017
FINANCIAL STATEMENTS Profit and loss AED millions 2017 FY 2016 FY Revenues 6,180 6,237 Direct costs (3,525) (3,598) Gross profit 2,655 2,639 Gross profit Margin 43% 42% SG&A expenses (407) (404) Depreciation and Amortization (186) (199) Gain on disposals 4 14 Share of profit from associates/ JVs 42 67 Other Income 636 954 Finance expense (254) (241) Finance income 125 120 Fair value gains/ (losses), provision/ reversal for impairments (613) (198) Net Profit for the period 2,006 2,752 Attributable to: Owners of the Company 1,996 2,782 Non-controlling interests 10 (30) Profit for the period 2,006 2,752 Basic and diluted earnings per share (fils) 25 35 AED millions Balance sheet As at 31 Dec 2017 As at 31 Dec 2016 Property, plant and equipment 2,931 2,986 Investment properties 16,077 15,773 Development work in progress 1,477 1,298 Inventory 2,593 2,449 Receivables 5,353 5,263 Cash 6,885 6,696 Other Assets 1,082 1,096 Total Assets 36,397 35,561 Equity 23,235 22,086 Debt 5,956 5,564 Payables, Advances and Other Liabilities 7,206 7,911 Total Liabilities and Equity 36,397 35,561 58
SEGMENTAL ANALYSIS AED Millions AED Millions 2017 FY recurring revenues of AED 2,851 million (2016 FY: AED 2,945 million) ¹ 1,723 1,819 2017 FY Segmental Revenue Performance 1,674 1,371 2,387 2,128 506 540 150 119 Investment Properties Hospitality & Leisure Adjacent Businesses Development Management Property Development 2017 FY 2016 FY 2017 FY recurring revenues gross profit of AED 1,557 million (2016 FY: AED 1,584 million) ¹ 1,4001,422 2017 FY Segmental Gross Profit Performance 1,060 960 100 109 135 61 102 (54) Investment Properties Hospitality & Leisure Adjacent Businesses Development 2017 FY 2016 FY Management Property Development ¹ Recurring revenues assets include Investment Properties, Hospitality & Leisure, Schools (Aldar Academies) and Property & Facilities Management (Khidmah) 2017 FY recurring revenues excludes Pivot revenue of AED1,052m (2016 FY revenue: AED785m) 2017 FY recurring revenue gross profit excludes Pivot gross profit of AED4m (2016 FY gross loss: AED107m) NB: Prior results segmental analysis included a separate Operative Villages segment, this now forms part of Investment Properties
GOVERNMENT RECEIVABLES Remaining cash inflows Remaining P&L events Transaction (AEDm) 2018 2019 Total Other income Sale of Al Raha Beach Land ¹ 285 190 475 - Infrastructure recoverables ² 363 256-535 619-898 201-480³ 648 446-725 1,094-1,373 201-480 ¹ Al Raha Beach land plot handed over in Q3 2016 with a payment plan structure ² Cash flow timing depends on handover of related assets ³ Additional infrastructure reimbursement submissions made to Government of Abu Dhabi, subject to approval