Aldar sells Yas Marina to government
17 February, 2010
Feb.17 (Zawya Dow Jones) Aldar Properties, Abu Dhabi’s largest developer by market value, has sold the racing circuit, marina, yacht club as well as other infrastructure assets at its flagship Yas Marina development to the Abu Dhabi government, its chief financial officer said Sunday.
Aldar sold the Yas Marina “yacht club, a number of buildings on the race track, and the track,” as well as “a number of internal roads, sewerage, electricity,” to the government, as part of the emirate’s plan to beef up infrastructure and diversify the economy, Shafqat Malik told Zawya Dow Jones in an interview.
Analysts were closely watching the developer’s results release with expectations that it would sell the prized asset to free up cash, after its profit slumped throughout 2009 and land sales remained few.
Aldar owns 40% of Yas Marina Circuit, which hosted the inaugural Abu Dhabi Formula One Grand Prix in November. It operates the circuit and is estimated to have spent $400 million building the $1 billion track in a joint venture with government-owned Abu Dhabi Motorsports Management, or ADMM, which owns 60%.
Aldar doesn’t comment on construction costs. Malik said details of the asset sales will be published in the company’s complete financial results.
“Aldar’s selling non-core assets was expected as reliance on government support has to be properly managed, and by selling the circuit Aldar frees up some needed liquidity instead of tapping into government pockets,” said Saud Masud, head of research at UBS.
Malik said the sale of infrastructure and property assets on Yas Island, which Aldar has spent at least $600 billion developing, back to the government was strategic and always a possibility. “There was always a plan to have some sort of an arrangement with the government,” he said.
“The whole of infrastructure in Abu Dhabi, and in Yas Island, is part of Abu Dhabi’s broader economic diversification plan – these infrastructure assets are part of that,” he said.