Aldar Properties to slash 24% of jobs, rein in operations

Aldar Properties, Abu Dhabi’s biggest property developer, said Monday it will slash its workforce by 24 percent as it seeks to cut costs. The developer plans to shed 105 jobs to match its manpower needs to its scaled-back construction schedule, the company said in a statement to the Abu Dhabi bourse. “Aldar’s new strategic plan takes into account the existing market environment,” the company said in the statement. It will “selectively target new developments where there is demonstrable demand, and increase Aldar’s large-scale fee-based development activities.” “The main objective of this new strategic direction is to return Aldar to long-term growth,” said chairman Ali Eid AlMheiri. Aldar Properties is building thousands of homes and offices across the UAE capital, but concerns have been raised about the company's ability to repay a massive debt pile and the government's growing stake in the company. The developer was rescued by a $5.2bn bailout by the Abu Dhabi government this year, after it struggled to stay afloat in the wake of a recession that halved property prices across the UAE. In January, the state-controlled firm sold assets including a Ferrari theme park and convertible bonds to the government for AED19.2bn ($5.23bn) to pay off its debt. The company this month approved the appointment of Greg Fewer as chief financial officer to replace Shafqat Ali Malik who quit last month “to pursue other opportunities". Fewer, who was previously employed by Abu Dhabi wealth fund Mubadala, will join the developer on Nov 1. Aldar recorded profits of AED127.3m in the second quarter of the year, following a loss of AED475.3m in 2010. A poll of property analysts last week showed respondents believed prices could fall a further 10 to 30 percent as developers add to excess supply in Dubai and Abu Dhabi while buyers dwindle. Home purchases in the UAE dropped by 44 percent to 1,459 in the third quarter from a year earlier, CBRE Group said this month. That’s down from 4,059 transactions in the third quarter of 2008, just before the crash. Abu Dhabi, the UAE capital and the fourth-largest oil producer in the Organization of Petroleum Exporting Countries, will continue to have a glut of most types of properties, leading to a further decline in rents and purchase prices, Jones Lang LaSalle said on Oct 16.