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ABU DHABI, Aug 8 (Reuters) - Aldar Properties, the largest property developer in Abu Dhabi, on Thursday reported a 7% rise in second-quarter profit year on year, saying sentiment in the property sector had improved following reforms to real estate legislation.
The state-linked builder of Abu Dhabi’s Formula One circuit, reported a net profit of 476 million dirhams ($129.6 million) in the three months ending June 30, 2019.
That compared with a net profit of 445 million dirhams in the same period a year earlier.
The capital of the United Arab Emirates amended its real estate laws in April to allow foreigners to own freehold property in some 15 designated zones to attract foreign investment and bolster the economy.
“On the back of a lot of these changes, we established our sales guides in the beginning of the year, both because of freehold titles and because of the relaxation of residencies within the UAE,” said Greg Fewer, Chief Financial Officer of Aldar.
“The sentiment shift ... behind our increase in sales guidance to 4 billion for the year,” Fewer said. “This has really opened up opportunities for international investors in the Abu Dhabi real estate market.”
EFG Hermes forecast Aldar would make a second quarter net profit of 477 million dirhams.
“There is an upswing in sentiment towards Abu Dhabi’s real estate market with the recent announcement of our 9 billion dirhams worth of development projects since the start of 2019,” Talal al-Dhiyebi, Aldar’s chief executive officer said.
Abu Dhabi property prices had been declining in recent years. They fell 6.4 percent year on year in the last quarter of 2018, the central bank has said.
In April property consultancy JLL said market sentiment for Abu Dhabi residential and retail sectors was subdued with limited demand.
Previously only UAE and Gulf nationals could own property, while foreigners were restricted to property ownership on a 99-year leasehold basis.
As for future new projects in the second half of the year, Fewer said they would be focusing on the demand they are seeing in the mid- and upper market segments.
“We see opportunities there that we will bring products to in the second half of the year.”
$1 = 3.6728 UAE dirham Reporting By Stanley Carvalho and Saeed Azhar and Tuqa Khalid; Editing by Shounak Dasgupta, Lisa Barrington and David Evans