Profit attributable to shareholders was up 21.6% year-on-year due to the change in revenue mix, release of contingencies on completed projects, and reduction in fair value losses on the Investment Portfolio. Profits were driven principally by National Housing projects and investment property income. Earnings per share increased as a result by 21.6% year-on-year to reach 3.9 fils per share.

Revenues were down year-on-year due to handovers at Sun and Sky last year and due to Phases 1 and 2 of Watani, the National Housing project, approaching construction completion.

Sorouh grew its recurring revenues from investment properties by over 50% year-on-year to AED74 million in Q1.

Substantial progress continues to be made across the development portfolio. The Gate Towers are 97% complete and alghadeer is 95% complete. Building completion certificates for Watani have been obtained for phases one and two.

Sorouh’s financial position is robust, with cash collections of approximately AED 1.4 billion in Q1, AED1.8 billion of cash on the balance sheet and gearing reduced to 32%.

Shareholder approval was obtained in March 2013 for the merger with Aldar Properties. It is anticipated that the merger will become effective in June 2013.

Abubaker Seddiq Al Khouri, Managing Director, Sorouh, commented:

“This is a very solid start to the year. In line with our strategy, the business is generating a significant amount of recurring revenues from its investment portfolio. National Housing also continues to be an important contributor. Integration work in preparation for our merger with Aldar is also progressing well and we expect the merger to complete in June this year.

“Substantial progress is being made on our large portfolio of developments as we move closer to delivering around 7,000 units between now and the end of 2014.

“The property industry is now entering the next phase of its evolution as it shows signs of genuine and sustainable recovery. Government investment aimed at economic diversification, such as Abu Dhabi’s five-year US$90 billion (AED330bn) capital spending programme targeting areas such as infrastructure, industry, tourism, education and health-care, will create real end-user demand for property in the coming years and help balance supply and demand."

Q1 2013 Development Portfolio Update

Shams Abu Dhabi
Sun & Sky Towers are now an established community with over 1,000 families living at the development along with key commercial tenants. BOUTIK Sun & Sky is generating solid footfall driven by Abu Dhabi’s first Waitrose supermarket, together with numerous other retail operators, including Italianissimo, La Brioche, Yogen Fruz and Café Macondo, among others. Commercial tenants at Sky Towers include the Austrian Embassy, Agthia Group, Al Ramz Financial Services, Advanced Integrated Systems and Arabian Construction Company.

The Gate Towers are 97% complete and advancing rapidly.

alghadeer
The first phase, comprising 200 residential units, has been given a Building Completion Certificate. The development is 95% complete and progressing well, with infrastructure development and finishing works to residential buildings moving at a rapid pace. The development is on track for phased completion and delivery in the second and third quarters of 2013.

Saraya
All infrastructure works at the Saraya master-planned development, near the Abu Dhabi Corniche, are complete and five plots are currently under construction by sub-developers. This is a positive development for the location and is a catalyst for other sub-developers. The project has also created an interest in the secondary market for the sale of land plots.

National Housing:
Construction at Watani is progressing well. A building completion certificate has already been obtained for Phases One and Two.
Construction work continues on Sorouh’s two other National Housing projects, at Ghuraibah in Al Ain and Al Sila’a in the Western Region. Both projects are on track for completion by the third quarter of 2013.

Investment Properties – Residential:

al rayyana
Remediation works are currently underway and tenants are expected to be able to move back into the development in the second half of 2013.

Al Murjan
All retail space has now been leased with Spinneys, the high-end supermarket chain, as the anchor tenant. 92% of residential units have been leased as at end of Q1 2013.

Investment Properties – Hospitality and Retail:

BOUTIK Al Ain
Carrefour, the anchor tenant for the property, has been in operation since December 2012 and has been witnessing increasing footfall. Numerous tenants are at present carrying out fitouts and an aggressive leasing programme is currently being pursued with more than 65% of the property having lease agreements and MOUs.

Tilal Liwa
Tilal Liwa, the hotel located in the Western Region, remains profitable and cash-flow positive with occupancy of 73% for March 2013.

Merger with Aldar
On 3rd March 2013, Sorouh and Aldar announced that the shareholders of each company had approved the merger of the two companies at their respective EGMs. The proposed merger will create a stronger and more diversified company to take advantage of future opportunities in Abu Dhabi and other regional markets in the coming years. On the effective date of the merger, Sorouh shares will be delisted from the Abu Dhabi Securities Exchange and Sorouh will be dissolved as a legal entity. Aldar will then be named AldarSorouh Properties PJSC. It is anticipated that, subject to the satisfaction of these conditions, the merger will become effective in June 2013. This timeframe is indicative only and is subject to change.

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