Hello everyone, welcome to the Aldar Properties nine-month 2025 financial results. My name is Ezra, I will be your coordinator today. If you would like to ask a question, please press star followed by one on your telephone keypad, and if you change your mind, press star followed by two. If you have joined online, you can submit a text question via the Q&A button on your browser. We will be taking questions at the end of the presentation. I will now hand over to Faisal Falaknaz, the Group Chief Financial and Sustainability Officer, to begin. Please go ahead when you are ready.
[Non-English content]. Thank you for joining today's call to discuss Aldar's financial results for the first nine months of 2025. Aldar has delivered another solid financial performance as disciplined execution on strategy and capital deployment continues to yield strong results. Our business has reached significant scale and maturity, with the development and investment platform serving as engines of earnings growth. This performance also reflects the continued strength of the U.A.E. economy as the country cements its position as a global hub for investment, talent, knowledge, and residents. Aldar is meeting sustained demand for high-quality real estate and long-term community infrastructure. The strong nine-month performance was driven by sustained development momentum backed by substantial domestic and international demand and execution against our sizable backlog. Increased earnings across our investment property portfolio supported by high occupancy, rental growth, and the contribution of recent acquisitions.
For the first nine months, group revenue increased 43% year-on-year to AED 23.6 billion. EBITDA increased 44% at AED 7.8 billion, setting us firmly on the course to deliver the upper range of our full-year guidance of between AED 10.4 billion and AED 10.8 billion, with the potential to outperform it. Net profit after tax for the first nine months increased 30% year-on-year to AED 6 billion. Aldar's effective tax rate for the first nine months was 12.6% versus 4.3% in the same period last year. This reflects the U.A.E.'s adoption of the 15% DMTT rate in January following the 9% general corporate income tax rate introduced a year earlier. Aldar Development has seen robust sales momentum from new launches and existing inventory on previous launches.
Group Developments has increased 19% year-on-year to AED 28.5 billion in the first nine months. We are on track to meet our full- year sales guidance of AED 36 billion-AED 39 billion. Driven by successful project launches, our total backlog has reached an all-time high of AED 66.5 billion, of which AED 57.3 billion in the U.A.E. This signifies an elevated rate of revenue recognition over the next two to three years. Meanwhile, Aldar Investment delivered a 17% increase in nine-month adjusted EBITDA to AED 2.3 billion driven by organic growth across our income-generating property portfolio, the positive impact of recent acquisitions, an increased contribution from Aldar Estates. The platform will continue to expand and diversify further over the next three years, driven by our develop-to-hold pipeline, which now stands at AED 17.6 billion, and further capital deployment, including strategic M&A.
On slide four, you will see a summary of recent corporate announcements. Demand for U.A.E. real estate remains strong, supported by healthy economic fundamentals and sustained investor confidence. Aldar continues to attract both individual buyers and institutional capital across its developments. In the third quarter, we launched three new developments. Fahid Beach Terraces on Fahid Island, Rise by Athlon in Dubai, and Al Deem Townhomes on Yas Island, bringing the total number of launches this year to eight. In Aldar Investment, we continue to develop capital into opportunities that scale and diversify recurring income streams. In the third quarter, we exercised the option to acquire Mubadala's 40% stake in Al Maryah Tower, which now has reached 97% occupancy, and we also acquired an additional 17.45% stake in Aldar Estates.
We have also expanded our develop-to-hold pipeline by an additional AED 3.8 billion in new projects, bringing our total deal pipeline to AED 17.6 billion. These new projects across resi, commercial, and logistics include: In residential, we are developing new residential communities in Alreeman and in Yas Island with more than 2,600 units to be made available for rent, bringing our total number of residential units to over 11,000 across the portfolio. In commercial, we are establishing Yas Business Park adjacent to Yas Mall with over 47,500 sq m of prime leasable space to further diversify and expand our commercial portfolio. In logistics, we are further expanding Abu Dhabi Business Hub by adding 175,000 sq m of gross leasable area directly catering to a mix of tenant segments including third-party logistics, e-commerce, and distribution.
We will also deliver Abu Dhabi's first Tesla Experience Centre, a purpose-built 5,000 sq m facility that will feature a showroom, service center, and delivery operations. Turning to a more detailed look at the Aldar Development on slide number five, group sales rose 19% year-on-year to AED 28.5 billion in the first nine months of 2025, maintaining a high and sustainable run rate. This was driven by strong uptake across existing inventory and new launches in the U.A.E., supported by our global sales network and resilient domestic demand. Our revenue increased 50% year-on-year to AED 17.1 billion, while EBITDA rose 58% to AED 5 billion, driven by continued delivery and revenue recognition from our expanding backlog. That backlog now stands at AED 66.5 billion, up from AED 54.6 billion at the end of last year. Our international businesses also delivered solid progress.
SODIC recorded AED 711 million in revenue and AED 1.5 billion in sales during the first nine months, while London Square delivered AED 1.1 billion in revenue and AED 521 million in sales. In the third quarter, London Square acquired one land plot and launched one new project, Brook Green, bringing total project launches to four year to date. Turning to slide six, you will see further details on U.A.E. development sales, which reached AED 26.5 billion in the first nine months, up 31% year-on-year. The mix of buyers remains highly diversified. Overseas and expatriate customers represented 77% of total U.A.E. sales, reflecting Aldar's continued appeal to international investors and end users. The sustained demand is supported by our broader product mix and the reach of our global sales network, which continues to deliver meaningfully and attract sales from key markets including India, China, Russia, the U.K., the U.S., and France.
Our development backlog in the U.A.E. now stands at AED 57.3 billion, providing visibility of revenue and cash flow over the next 30 months. On slide number seven, you will find detail on Aldar Investment, which has grown into a well-diversified platform with AED 47 billion of assets under management and a strong base of recurring income. Revenue increased 16% year-on-year to AED 5.8 billion in the first nine months, while adjusted EBITDA rose 17% to AED 2.3 billion. To give a better idea of underlying performance, if we exclude disposals and divestments of residential strata units, adjusted EBITDA for the nine months rose to 22%. Turning to slide eight. The investment properties portfolio continued to deliver strong growth during the first nine months with adjusted EBITDA rising 20% year-on-year to AED 1.5 billion excluding disposals and divestments. Adjusted EBITDA increased 27%.
Performance was supported by portfolio-wide occupancy of 97% as of the end of September alongside continued rental uplifts and contributions from the newly acquired Masdar City residential and commercial assets contributing AED 185 million in adjusted EBITDA. Commercial adjusted EBITDA in the first nine months reached AED 643 million, up 17% year-on-year and excluding disposals, adjusted EBITDA rose 31% year-on-year. Performance was supported by contributions from 6 Falak and the Masdar City assets and the ramp-up of Al Maryah Tower and a strong rise in rental rates during the period with portfolio occupancy now at 99%. It is also worth noting that Yas Place, which was completed in Q2 this year, is already fully leased. Residential adjusted EBITDA increased 29% to AED 390 million, supported by contributions from the Masdar City assets and rental growth across the portfolio, which is 98% occupied.
During the period, we generated AED 71 million from stock sales, in line with our capital recycling strategy. Excluding strata units divestments, the portfolio adjusted EBITDA grew by 34%. Retail adjusted EBITDA rose 17% year-on-year to AED 420 million with an average occupancy at 90%. Yas Mall reported strong momentum with occupancy of 97% driving a 12% year-on-year growth in footfall, 10% rise in tenant sales, double-digit growth in turnover rents. Meanwhile, Al Hamra in RAK , which reopened in 2024, and Al Jimi in Al Ain, which reopened in September 2025, are both operating at 98% occupancy following their respective upgrades. Meanwhile, the formation of a new retail platform under the Mubadala joint venture combining Yas Mall and The Galleria Luxury Collection is very close to closing in Q4.
Logistics adjusted EBITDA rose 48% to AED 67 million with occupancy at 98%, supported by the contribution of Al Marqaz assets and solid leasing at Abu Dhabi's Business Hub's warehouses and office space. On slide nine, you will see that the first nine months, our Hospitality, Education, and Estates platform continued to deliver a solid performance while advancing key initiatives. The Hospitality portfolio maintained a 69% occupancy in the period and achieved an 8% increase in ADRs and a 4% increase in RevPAR. EBITDA in the first nine months was AED 211 million, 2% lower year-on-year, reflecting the fact that several properties have been partially offline on the back of our AED 1.5 billion transformation program. The Education platform recorded EBITDA of AED 212 million, up 1% year-on-year due to previous year one-offs and pre-operational cost of new school openings.
However, underlying performance has been strong, supported by enrollment growth, fee uplifts, and contributions from new schools, including Noya British School. Excluding one-offs, and on a like-for-like basis, adjusted EBITDA increased 12% to AED 210 million. Enrollment across our schools now stands at nearly 36,000 students in our operated schools. Enrollment grew by 14% year-on-year, driven by organic growth as well as the addition of new schools, Noya British Academy and Yasmina American School. Meanwhile, enrollment in our managed schools declined 14% year-on-year, mainly reflecting the handover of five schools to the Ministry of Education. We expect further growth ahead with Muna British Academy set to be operational in October 2025 and King's College School, Wimbledon following in 2028. Aldar Estates continued to demonstrate scale and strength with adjusted EBITDA rising 25% to AED 313 million.
Performance was driven by contract renewals, new mandates, and continued efficiency gains across facility management, property management, and community management. During third quarter, we increased our stake in Aldar Estates to 82.5% through a AED 713 million acquisition of the 17.45% stake held by Modon Holding. Turning slide number eight and our key balance sheet indicators. Over recent months, we have taken a countercyclical approach to funding aimed at reinforcing our financial resilience and building robust capital buffer to support long-term growth. In the third quarter, we raised AED 290 million through taps on existing green sukuks maturing in 2034 and 2035, which attracted strong regional and international demand and was priced at record tight spreads versus U.S. Treasuries. In parallel, London Square secured a GBP 150 million senior unsecured conventional revolving credit facility.
This builds on funding activity earlier in the year, including the AED 9 billion sustainability-linked revolving facility and AED 2 billion in hybrid and green bond issuances. Meanwhile, we have maintained a prudent leverage profile and strong interest coverage while further strengthening liquidity. The company now benefits from AED 12.3 billion in free and unrestricted cash and AED 17.4 billion in committed undrawn facilities as of the end of September. The average senior debt maturity now stands at 5.3 years with no material refinancing in the near term. Looking ahead, we will continue to deploy capital in a disciplined manner maintaining a prudent leverage profile, strengthening recurring income, and aligning our funding strategy with long-term value creation. You will find our approach to sustainability and key highlights on slides 11 and 12.
We've made strong headway on the environmental side, cutting energy use intensity by 31% and reducing embodied carbon and construction by 29% compared to business as usual levels. At the same time, we've also recycled 86% of construction and demolition waste. We continue to expand Aldar's social impact through collaboration with Dubai Cares to improve access to quality education, having completed the first of two planned school renovation projects. Through Aldar's Thrive Scholarship Programme, we have now enrolled 67 students since its launch in 2022, offering quality education to students from low-income households with 16% of beneficiaries being people of determination.
To close, and turning to slide 13. While our full-year guidance for 2025 remains unchanged, supported by the strong visibility we have across both our development and investment platforms, we remain on track to reach the upper end of our full-year guidance with a group EBITDA of between AED 10.4 billion and AED 10.8 billion and group development sales in the range of AED 36 billion-AED 39 billion. Aldar Development is expected to deliver an EBITDA of AED 6.6 billion-AED 7 billion, while Aldar Investment is guided to reach an adjusted EBITDA of AED 3.2 billion-AED 3.3 billion. The first nine months have once again highlighted the scale resilience and the balance of Aldar's diversified business model. Our development business continues to translate strong demand into record sales and an expanding backlog, supported by sustained domestic and international appetite for our high-quality communities.
Meanwhile, Aldar Investment continues to grow, in both scale and breadth, underpinned by high occupancy, rental uplifts, and contributions from recent acquisitions. With that, we conclude today's presentation, I welcome your questions. Thank you very much.
Thank you very much, Faisal. We will now open for the Q&A session. If you would like to ask a question, please press star followed by one on your telephone keypad. When prepping to ask your question, ensure your device is unmuted locally. If you change your mind or your question has already been answered, please press star followed by two. You can also submit a text question via the Q&A button on your browser. Our first question comes from Rahul Bajaj with Citigroup. Your line is now open. Please go ahead.
Hi, Faisal. This is Rahul Bajaj from Citi. I have three quick questions, if I may please. The first one is on the rental rates. So, you mentioned you've seen very good rental rates uplift in the Aldar Investment portfolio, across your portfolio, commercial logistics, residential, and retail. Just wanted to understand how do you expect each of these asset classes to kind of evolve over the medium term in terms of rental rates? Where do you expect a slowdown or an acceleration? That's my first question. My second question is regarding the schools. You mentioned that five schools have been returned to Ministry of Education. Just wanted to understand if any impact on your bottom line from these schools getting returned. Is it material and do you expect more schools to be returned in the medium term or a dded?
How should we think about kind of this movement in schools which are managed by Aldar? And my third and final question, just wanted to quickly check on the 50%, 50/50 sort of recurring portfolio EBITDA which you aspire to get to by 2030. You talked about this kind of the D-Hold, additional D-Hold CapEx which you announced yesterday. Which gets you to around close to AED 18 billion of D-Hold pipeline over the next few years. Do you think this AED 18 billion on top of the deployment CapEx which is in the pipeline should be enough to get you to that 50/50 recurring versus non-recurring?
I mean, I'm just trying to think, t he other way to ask my question is, I mean, at what growth rate are you thinking recurring and the non-recurring EBITDAs to sort of progress over the next three to five years so that you end up at a 50/50 mix by 2030? Those are my three questions. Thank you.
Thank you, Rahul. Starting with the first question on rental rates, they vary by asset class. We can start by residential rental rates. We are capped by 5% typically when we renew a lease with an existing tenant, but if the lease rolls over, we've typically seen rental rates increase more than 10%, especially with our portfolio in Alreem. On the commercial office front, we've really seen very strong demand, especially in ADGM, like for example, just I think it was a couple of months ago, we leased a full floor to an international tenant with a headline rent of more than AED 3,000 per square meter, which we've never done before. Like typically our average rental rate in the building was somewhere around AED 2,300-AED 2,500.
With retail, you've seen the increase in sales, Yas Mall sales, for example, is up more than 10%, what's happening, tenants are able to afford higher OCRs, occupancy cost ratios, we've been continuously pushing up rents. Yas Mall has been a big contributor to the double-digit growth you see on the retail portfolio. On logistics I'd say the rents at least in our portfolio have been somewhat stable. We haven't seen a significant pickup there other than the demand on the space itself. In terms of the medium rate view, I'd say the key message I would give is we continue to see more and more convergence towards Dubai prices. The best example to give is the ADGM rents. ADGM rents a couple of years ago were AED 1,600-AED 1,700 per square meter. Again, as I noted, the last incremental large lease we did is north of AED 3,000.
That's getting close to where DIFC is today, but still there's significant room for growth in my view. That's on the rental side. Your second question on schools, managed schools contribute less than 5% of our overall EBITDA for schools. I would say that the impact is insignificant. What is the likelihood of more schools being taken back? It's not unlikely and it's not highly likely, but this is a direction that we are seeing from the government. We don't know how quickly it's going to happen, but there's a decent probability that we'll continue seeing that trend. But again, our focus in terms of financial return is predominantly on operated schools, not on the managed schools. The managed schools, we obviously have a big social responsibility to play, which is why we put our weight on it. It's less about the financial returns there.
The last point about the 50/50 target, this is a very ambitious target if I'm being very honest given the pace of our development business growth, but we have intentionally sets that aggressive target on ourselves because we want to send a message to the investor community, and we want to send a message to the internal management team that recurring income is a very high priority. This is something that we want to double down because this is the segment that will pay off through the cycles. Is the D-Hold that we have today, the AED 17.6 billion, enough for us to reach there? No. We still want to continue growing our D-Hold portfolio. We continue to have a sizable land bank that this will play a role in. For example, logistics today contributes 5% of our AIP portfolio. We want to grow logistics to at least 20%, 25%.
We want to continue investing in other classes as well. Then you layer on top the M&A deployment that we're going to do, then you layer on top the normal organic growth that you're going to see across the investment properties portfolio and the operating businesses, which are obviously growing at a much higher pace. But no, what we have today on plate is not enough. We still have more work to do.
All clear.
This is very useful. Thanks. Thanks, Faisal.
Thank you.
Our next question comes from Mohamad Haidar with Arqaam Capital. Your line is now open. Please go ahead.
[Non-English content], Faisal. Mohamad Haidar from Arqaam Capital.
[Non-English content], Mohamad .
I s on the development side of things. It's a bit generic on the markets in Dubai and Abu Dhabi. We know demand is still very robust, the market is hot. Are you seeing any signs of stress or challenges with the recent or the new launches across both Dubai and Abu Dhabi? Like, is it taking you longer to sell the units in September, for example, versus earlier this year?
No, we haven't seen stress. One example is Yas Living, which we launched three, four weeks ago, completely sold out. Al Deem Townhomes, which was only to Emiratis, completely sold out. Fahid Beach Terraces, which we launched in Q3, we didn't sell out, but w e don't want to sell out on everything because we have a strategy that it's a balance between taking risk off the table and maximizing your prices. So, on certain products, we want to push prices a little bit more aggressively and t hen we are happy to expect a longer absorption. It's usually the high-ticket units that we have that take a little bit longer to move, like things that are, I would say, AED 15+ million . But again, those the units that we're sitting on have a 2 + 3 years maturity life until handover. We're not carrying a lot of risks there.
We've already sold 70%-80%+ on those assets. We're being disciplined but not super aggressive on payment plans. Again, the sweet spot we have decided to be in on payment plans is somewhere between 60%-70% during construction. We don't see ourselves going to 80%-90% because we think that will then affect the velocity of sales and the affordability of buyers. And then the last point, I think this was in the media recently, is we have typically been selling premium, upper premium, luxury, ultra-luxury. And given the population growth, we want to serve a wider segment. We are replenishing our land bank to cater to more affordable to mid-income product. Are we seeing any stress? No, we're not seeing any stress.
That's very clear, Faisal. Thank you. One more question on D-Hold. So AED 18 billion under development. Obviously a lot of these will come after 2027, so they're not part of the guidance. If we assume 10% yield on development, so another AED 1.8 billion, AED 1.7 billion in EBITDA. So this by and large will come after 2027. Am I right in my rationale?
Yes. If you refer to the investor deck, there is a full schedule on each of the assets. The GDV, so what we show you is we show you the gross development value of those assets, and the yield I would assume on those is 7%-8%. They're 10% yield on cost, which is the CapEx , but the GDV, the gross development value that we disclose, is the value of the assets that we estimate at handover. You should assume somewhere between 7%-8% yield on that.
Okay, clear. The difference between both yields will probably show in the fair value gains when the asset is completed?
Yes, 100%. Absolutely, yes. Yes, yes.
Okay. Excellent. Thank you, Faisal.
Thank you.
Our next question comes from Harsh Mehta with Goldman Sachs. Your line is now open. Please go ahead.
Hi, Faisal. Thank you very much for the presentation and congratulations on the earnings. I had a quick question on the development business. If you see last few quarters, presales have been in the range of AED 8 billion-AED 9 billion a quarter. Given the market is strong, the buyer profile is changing, you have the land bank, is there a plan or strategy to kind of drive more aggressive presales? Could we see 20%-30% higher presales over the next few quarters and what would be the strategy to kind of drive that higher monetization on the land bank?
We will always capitalize on the strength of the market. Let's not get ahead of ourselves. We will come back to you in February, March with our view on where the market is. Internally, we are going through our budgeting and business planning process. Obviously, we are going to keep pushing. On what exactly that number will be, give us time until Q4 results.
Got it, sure. Maybe just one follow-up question. When we look at the property development revenues, which are now around AED 5 billion mark every quarter, which is pretty much a reflection of the uptick in presales we started seeing from 2023 on a quarterly run rate. Which started hitting AED 5 billion-AED 6 billion of presales. Given now that you are already at around AED 8 billion, AED 9 billion of presales, is it fair to assume that in two to three years' time, your quarterly revenue, if the execution goes ahead as strong as it is right now, we should probably expect quarterly run rate on actual revenues pretty much a reflection of what you are selling today, which is going to around AED 8 billion, AED 9 billion a quarter?
It is in our guidance. If you look at our average CAGR for the next three years on the development side, it is I believe 30%-35%.
Got it. Clear. Thank you.
That should get you I think to where you're guiding.
Perfect. Thank you.
Our next question comes from Taher Safieddine with JPMorgan asking, can we get some color on the U.A.E. development portfolio presales going into Q4? We have seen some new launches. Also, can you comment on land replenishment in Dubai? Where are we on this plan?
Q4. We just announced The Row, which is a luxury apartment offering just opposite the Zayed National Museum. This is a new district in the Saadiyat Cultural District. There's another launch that we're probably going to do by year-end. That's what we have on the plate for now, and we think that will deliver the guidance that we need. Don't forget, we continue to sell inventory quite well. A good indication on how well inventory sales have been is we have sold almost 80% of our opening inventory position in December 2024. We're not only relying on new launches, we're relying on continuing to sell inventory so that we don't continue building up significant inventory levels. In terms of the replenishment in Dubai, it continues to be a priority. As soon as we have any updates, we keep you posted.
Thank you. Our next question comes from Aaron Armstrong with Ashmore Investment Management asking, please can you discuss the presales performance on the international business and when you expect business to recover?
Apologies, yes. The international business I believe is down. International sales are down 50% year-on-year. We should see a decent recovery from SODIC in Q4. I think with the rest of the businesses next year, there's been some positive news coming out of the U.K. on the Home Safety Act and the government putting legislation to expedite development approval. We're still early in the game there, I think. We think you'll see some improvement starting Q4 and then more starting next year.
Thank you very much. Our next question comes from Seki Mutukwa, asking, looking into Aldar Development U.A.E.- only presales in 2026, does your base case assume higher average selling prices per square feet and more launches than 2025 to drive the growth?
We will come back to you after full year results.
The next question asking, hi, thanks for taking my questions. Excluding M&A, what is your net profit target for 2030? What is the remaining GDV yet to be recognized in terms of revenues from your Abu Dhabi development portfolio that is Saadiyat, Yas Island, Al Balghaiylam , and Alreeman combined?
On the net profit target, there's a lot that can change over the next four years. I would say it's not an exact science. It's on us as the management team to deliver on that number. The how, we will figure it out. And then on the remaining GDV, at least on what we reported from the AED 57 billion, I think about AED 36 billion-AED 37 billion of that comes from Abu Dhabi.
Our next question comes from Rawan Shaker with SICO asking, out of the sales of AED 9.1 billion in 3Q 2025, how much is Al Deem Townhomes?
If you look at Slide 21, which has your sales breakdown, it's about AED 1.6 billion.
The next question. From Boudewijn Schoon with Aegon asking, dear sir, I have three questions. Can buyers that are included in the backlog withdraw from these sales? How do you expect working capital to develop as a percentage of sales? Is it indeed coming down? Would it remain stable or increase? Do you change your strategy to cope with the amount of residential supply coming potentially to the market? Thank you.
On buyers, no, they cannot withdraw. This is a hard commitment, and if they do, there are penalties associated with that. The only reason they can withdraw, there's an amicable agreement between us and them. Working capital, the guidance that I've typically given is for every billion that we sell, we probably need somewhere between AED 100 million-AED 150 million in working capital requirements. The last question, do you change your strategy to cover the amount of—n o, not really, especially in Abu Dhabi. The supply-demand dynamics are quite healthy. Abu Dhabi today, I believe, has no more than 40,000, 50,000 residential units under planning or construction. There's surely significant pent-up demand for very high-quality real estate, and Aldar as a Lifestyle brand and a brand that's focused on providing communities that focus on wellness, green living, surrounded by schools, etc., I think we have a very strong competitive advantage.
The only caveat to that I'd say is the point I mentioned earlier is we've been very focused on premium and above. We want to start catering more to middle income. That's something that's going to start slightly contributing more to our portfolio going forward.
The next question asks, price point-wise, from 2025 sales, this year Aldar has higher price point compared to 2024. How do you view your profit margin in the next 22 years from this mix?
From the current mix, I think it's pretty much in line with where we are currently around that 35% mark. Obviously you have projects that are significantly higher and you have some projects that are slightly lower because we pay for land, etc. Luxury product obviously attracts much higher margin, for example. I'd say we continue to be very committed to delivering a 40%+ gross profit margin on our U.A.E. property and development and sale business.
Our next question. Thanks for taking the question. Given you are on track to reach the upper end and possibly beat the FY 2025 guidance on EBITDA, why did you refrain from upgrading guidance like you did last year at the nine-month 2024 results? Any reason not to do it this year? Is it fair to assume a much stronger presales performance given launch calendar and 4Q, i.e., AED 10 billion or better?
We like to keep a good surprise. On a serious note, the biggest risk we have is our supply chain. We just need to make sure that we deliver on our value of work done targets. So, we said the upper end of the range because there is a high probability that we are going to hit that, but it is not entirely in the bag. We don't want to say we are going to exceed guidance because there is a risk that we might not exceed guidance, but we feel good about it. There is a good probability that we will exceed guidance, but let us see how the year goes.
Our next question comes from Harsh Mehta with Goldman Sachs. Your line is now open. Please go ahead.
Thank you. Faisal, just one more question. You know, in the press release you've mentioned you acquired 40% stake in Al Maryah Tower from Mubadala, and it mentions that Aldar has exercised its option to acquire this stake. I was just hoping to know, you know, on all the other joint ventures that you have with Mubadala, do you also have a right to exercise the option to acquire Mubadala's stake or this was unique just for this particular asset?
I think we've highlighted in the past, Harsh. The agreement with Mubadala was there will be a path towards consolidating our ownership. This is structured all across our partnerships with them. Now the only exception obviously is the development-to-sell joint ventures that we have which are self-liquidating in nature, but on the develop-to-hold portfolios, yes, we do have the option to take them out at market value within a certain period.
Understood. That's very clear. Just for this asset, it seems there was like around 20% uplift in market value between 2022 when you initially co-invested versus now. That's again, as you say, based on the current market trends and occupancy of the yields that you are generating. Is that fair?
The deal was a slam dunk for us. We did incredibly well. This building had some structural issues. We bought it out of a bankruptcy. I think it costed us all in with the rectification about AED 450 million, and I think it's sitting on the books today, north of AED 800 million.
Got it. That's clear. Thank you.
Our next question asked, could you please comment on the gross margin profit for Al Deem Townhouses? Would it be consistent with the 30%-35% margin guidance for property development?
That's a very good question because Al Deem is an exception because it doesn't sit under the Property and Development and Sales segment. If you recall, under Aldar Projects, we have what we call fixed-price contracts. So the overall Balghaiylam project, the National Housing Project, where we typically make margins north of 10%, I would say, Al Deem is a component of that overall margin. I would say it's actually more than 10%. Al Deem is quite accretive given we were underwriting lower prices at the time when we won this project, but today obviously prices have gone significantly up. There's no specific margin like PDS margin that you can refer to, but this will be part of the revenue recognition that you see on the PDS segment through the fixed-price contracts.
The next question asks, do you expect any changes in the regulation that might materially impact the U.A.E. real estate sector in 2026?
Not to my knowledge, U.A.E. government is very pro-business and continues to push for regulations that will continue to attract more population, more investors, more job creation. So whatever regulations come, I think we will continue to be key beneficiaries.
The next question comes from Jonathan Milan with Waha Capital. Since Abu Dhabi has only 40,000-50,000 units under construction and population is growing rapidly and not slowing down, why aren't you launching a lot more units? You have only 17,000 under construction based on your presentation?
It's about being disciplined. I mean, look at our growth over the past few years. We sell AED 3 billion, AED 4 billion. We doubled and doubled. We can't continue doubling forever, and we don't want to flood the market. We don't want to be sitting on excessive inventory. We're growing responsibly with the market, with what the market wants. Once again, Abu Dhabi as a city continues to have significant room for growth, both in terms of quantum and pricing.
Thank you very much. Just as a reminder, if you would like to ask a question, press star followed by one on your telephone keypad now. You can also submit a text question via the Q&A button on your browser. Our next question asking, can we get an update on M&A pipeline within the recurring portfolio? What kind of segments, geography are you looking to tap? Should we expect some large-ticket transactions to come through in the near term? How should we think about dividend payouts amid a strong growth trajectory across the group? Is priority for growth versus dividends at this stage?
So M&A, the closest eminent one is Galleria. There's going to be some capital deployment associated with that just to maintain our 75% ownership there. I believe year-to-date we have invested AED 2.3 billion, we're not that far off the guidance actually. If you remember the discussion we were having earlier in the year, we're saying let's see, let's see. I think things have surely moved in the right direction. We have stuff in the pipeline as well. As noted always, I think the number one asset class that excites us is industrial and logistics, so watch this space. Dividends. Priority is growth, we will maintain our sustainable progressive dividend policy, we will prioritize growth.
Thank you very much. That concludes the Q&A session. I will now hand back over to Faisal for any closing remarks.
Thank you all for your usual support. I'd like to iterate, we continue to feel very upbeat, very confident, and very excited to tell you about our full- year results in February and more excited to tell you about our plans to come. Thank you all.
Thank you very much, Faisal, and thank you everyone for joining. That concludes today's call. You may now disconnect your lines.