Aldar Properties PJSC ($ALDAR)

Welcome, everyone, the Aldar Properties Q1 2026 Financial Results Call. We'll begin shortly. [Operator Instructions]. Hello, everyone, and thank you for joining the Aldar Properties Q1 2026 Financial Results Call. My name is Gabriel, and I will be coordinating your call today. [Operator Instructions]. I will now hand over to your host, Mr. Faisal Falaknaz, please go ahead.

Good afternoon everybody. Thank you all for joining today's call to discuss Aldar's first quarter '26 Results. Before I turn to the numbers and for those of you who have not joined our recent fireside calls, let me briefly set the scene for the quarter and where we are today. As you know, the latter part of the first quarter conceded in the period of heightened regional tension. The UAE once again demonstrated the strength of its leadership and institutional framework with a coordinated and decisive response. Authorities took decisive action to safeguard residents, protect critical infrastructure and ensure continuity of economic activity, reinforcing stability and confidence. At Aldar, our immediate priorities were the safety of our people and communities. Having taken precautionary measures and safety assessments across the business, we rapidly returned to the office and resumed full construction and retail activities. Our communities, retail destinations, offices, schools and development sites remain operational and we have seen no material physical impact to our assets. While global supply chain disruptions are affecting pricing, we have not seen any material impact to our business. We have taken proactive measures, including [indiscernible] purchasing, increased local sourcing and alternative logistics routes to mitigate potential disruption. This is further supported by a diversified contractor base committed to Aldar as a quality developer. In this context, Aldar delivered a strong start to the year with operations continuing on a largely business-as-usual basis, notwithstanding softer performance in hospitality and development sales in March. And I will cover this in more detail later on the call. But first, at group level, revenue increased 12% to AED 8.7 billion. EBITDA rose 22% to AED 3 billion and net profit after tax increased 20% to AED 2.3 billion. This was driven by continued recognition of our development backlog, together with resilient earnings from our recurring income platform. Within Aldar Development, group sales stood at AED 6.7 billion, a year-on-year decrease of 25%, largely due to subdued sales in March, while backlog rose to AED 72.1 billion, including AED 62.2 billion in the UAE. Aldar Investment delivered adjusted EBITDA growth of 18% to AED 905 million supported by high occupancy, long-term lease structures and contributions from recent acquisitions. We expect the platform to continue to expand and diversify further over the next 4 years, driven by organic growth, strategic acquisitions and our Developed-to-hold pipeline, which stands at AED 20.1 billion as of March 31. On Slide 4, we summarize our recent announcements. At the group level, we strengthened our financial position further through a series of transactions. In January, we completed a USD 1 billion public hybrid issuance, followed by another USD 1 billion hybrid issuance to Apollo in February. Most recently, Aldar issued a AED 5 billion sustainability-linked revolving credit facility in April, attracting strong demand from a broad group of regional and international banks, reflecting confidence in the group's credit strength and growth strategy. On landbank replenishment in early 2026, we announced the addition of AED 23 billion of GDV to our [indiscernible] landbank across plots on Saadiyat Island, Yas Island and adjacent Yas Island, and in Dubai, we announced the expansion of our existing strategic joint venture with Dubai Holdings through the addition of 2 land plots with a combined of AED 38 billion. We launched 2 projects in the UAE in the first quarter, the Baccarat Residences in Abu Dhabi and The Wilds Residences in Dubai. Following a deliberate pause in March to reassess market conditions, Aldar resumed launches in April with the Yas Park Place on Yas Island. The launch reflects a disciplined approach to aligning location, product and pricing with evolving demand, and I will provide further details on the next slide. In Aldar Investments, we built on our existing 24 Masdar City joint venture with Mubadala with the acquisition of The Link, adding 5 fully leased mixed-use buildings to the portfolio. In April, we all expanded our Industrial & Logistics portfolio through the acquisition of 3 additional purpose-built multi-let warehouses in KEZAD. This transaction increases the segment's contribution to investment properties assets under management from 6% to 8%. In addition, we expanded our developed-to-hold pipeline by AED 2.8 billion with 2 community projects comprising, 9,000 affordable residential leasing units to be delivered under the Department of Municipalities and Transports Value Housing Program in Abu Dhabi. This, along with our existing portfolio and other residential [indiscernible] projects in the pipeline will bring our residential portfolio to over 20,000 units over the next few years. Turning to a more detailed look at Aldar Developments on Slide #5. The business delivered strong performance during the quarter, supported by continued project delivery and backlog conversion. Revenue increased 14% to AED 6.5 billion and EBITDA rose 23% to AED 2.2 billion and group sales were AED 6.7 billion with UAE sales at AED 5.9 billion. The market became more cautious with sales moderating significantly during the month of March. In response, we are taking a highly disciplined approach to the cadence of launches and project [indiscernible]. In April, Yas Park Place, our first launch since the conflict started, so a solid demand with 80% of the units launched sold in the first phase, generating over AED 800 million in sales. The promotional 50-50 payment plan introduced for Yas Park Place has supported momentum as pricing remains firm trending marginally upwards from the last launch on Yas Island. This supports our view that demand remains resilient for the right product, underpinned by a structurally undersupplied market in Abu Dhabi and strong long-term economic fundamentals. As we look ahead, launch sequencing will lean more towards the mid-market to premium products where we are currently seeing the clear steps of demand while remaining disciplined on pricing and phasing. Turning to Slide #6. You will see further details on the UAE development sales. The mix of buyers in Q1 remained well diversified. Overseas buyers represented 40% of total UAE sales, while the resident expats accounted for 48%, with UAE nationals at 12%. To an extent, the relatively high proportion of international buyers is a reflection of the product launch during the quarter, and similar to 2025, we expect this trend to normalize as the year progresses. In April, within Yas Park Place, sales resident expats and UAE nationals, respectively, represented 34% and 46% of sales, consistent with the profile of the project while overseas buyers accounted for 20%. In Q1, cash collections totaled AED 4.3 billion in line with contractual payment schedules and demonstrating continued buyer commitment. And as at the end of March, collections were strong and in line with historical trends. Meanwhile, default rates remained relatively low at around 1%. The UAE development backlog now stands at a record AED 62.2 billion, up from AED 61 billion at year-end 2025 with an average duration of 29 months giving strong visibility on future revenue and cash flow. On Slide #7, you will find details on Aldar Investment, which has grown into a well-diversified platform with AED 52 billion of assets under management and a strong base of recurring income. Revenue increased 14% year-on-year to AED 2.1 billion, and adjusted EBITDA rose 18% to AED 905 million. Performance was supported by high occupancy, long-term lease structures, contributions from strategic acquisitions and reflects the defensive qualities of the portfolio across a diversified mix of segments. Turning to Slide #8. The Investment Properties portfolio continued to deliver strong growth with adjusted EBITDA rising 27% year-on-year to AED 632 million. Performance was supported by portfolio-wide occupancy of 96% as at the end of March alongside portfolio expansion, with recent strategic acquisitions driving scale and contribution to the bottom line. Commercial adjusted EBITDA of AED 235 million was up 11% year-on-year. The portfolio remains fully occupied, supported by strong demand for Grade A office space from a diversified tenant base that includes government-related entities and established corporates. Performance was further driven by contributions from the recently completed D-Hold asset Yas Park Place and the newly acquired buildings at The Link in Masdar City, which are all running at full capacity. Recent leasing activity reflects strong pricing with new leases signed at record levels in key locations such as ADGM, residential adjusted EBITDA of AED 127 million was down 4% primarily due to the turnover of a bulk lease and the refurbishment of residential units in Eastern [indiscernible]. Occupancy remained high at 96% supported by the long-term lease renewals. Retail adjusted EBITDA rose 65% year-on-year to AED 228 million, primarily driven by contributions from the recently added Galleria Luxury Collection as well as strong occupancy and rental rates. Average occupancy of the portfolio, excluding Remal Mall, stood at 96%. The Retail portfolio remained fully operational throughout this period with footfall stabilizing following a decline in early March. Overall portfolio tenant sales, including Yas Mall, remain in line with Q1 2025 levels. While in the Luxury segment, we have seen some softening in recent weeks. The resilience of retail rental income through this period is also supported by fixed base rents with a large portion of leases renewed earlier in the year under long-term contractual arrangements. Industrial & Logistics delivered particularly strong growth with adjusted EBITDA increasing 157% year-on-year to AED 43 million driven by organic growth and contributions from Al Markaz and two KEZAD assets acquired in 2025. Occupancy stood at 96% with the portfolio characterized by long-term lease arrangements with logistics operators and the indications of emerging demand from new market segments. Turning to Slide #9. In Hospitality & Leisure, adjusted EBITDA increased 6% year-on-year to AED 98 million with performance supported by strong activity in January and February. Average daily rates for the quarter increased 24% to AED 849 million and RevPAR -- sorry, AED 849 and RevPAR was up 13% to AED 546. Occupancy stood at 64%, reflecting softer demand in March due to the disruptions to regional flight connectivity and international tourism, which was partially offset by resilient domestic corporate event bookings and [indiscernible] demand. During this period, we have accelerated our hotel transformation program to strengthen asset positioning while also optimizing operations. In Education, adjusted EBITDA increased 8% year-on-year to AED 67 million driven by higher enrollment from new schools added to the portfolio and tuition fee increases, total enrollments across owned and managed schools has reached over 36,100 students. Following the temporary shift to distance learning since early March, we have seen a smooth return to normal and in-person learnings over the last 2 weeks. Importantly, cancellations have been minimum with 99% of students continuing into term 3, reflecting stability in the population and in demand for high-quality education offered by our schools. In Aldar Estates, adjusted EBITDA declined 3% to AED 87 million, reflecting one-off impacts on the project management and the valuation and advisory verticals. The business continues to operate at scale, managing approximately 145,000 residential units, 2.5 million square meters of retail and commercial space and contract valued at over AED 2.7 billion. Turning to Slide #10. Our key balance sheet indicators over the last couple of years, we have taken a countercyclical approach to funding aimed at reinforcing our financial resilience and building a robust capital buffer to support long-term growth through the cycle. This has meant that Aldar is also well positioned to navigate periods of market volatility and unforeseen external shocks. Aldar's capital position strengthened further during the quarter, supported by a series of successful transactions that enhance liquidity and diversified funding sources. In January, Aldar successfully priced USD 1 billion of hybrid notes, and then this was followed in February by a further USD 1 billion of hybrid notes issued to Apollo. As a result, total available liquidity stood at AED 33.2 billion as of the end of March, comprising AED 13.9 billion of free and unrestricted cash and AED 19.4 billion of committed undrawn facilities. In April, we also closed a AED 5 billion sustainability-linked revolving credit facility, which increased the available liquidity further to AED 38.2 billion. You will find our approach to sustainability and key highlights on Slides 11 and 12. We have continued to make tangible progress on our forward-looking agenda, all new developments launched achieved a 2-star Fitwel rating and in Adbu Dhabi all new development launched, achieved a 3 Pearl Estidama design rating. We are achieving a 34% reduction in energy use intensity by design versus ASHRAE 2007 standards, alongside a 42% reduction in water use intensity compared to the Estidama baseline. We are also reducing embodied carbon and construction materials with a 38% reduction across our existing asset base, energy intensity reduced by 2.4% during the period, reflecting ongoing optimization and efficiency initiatives. In addition, 95% of construction and emission waste is being recycled, supporting our circularity objectives. To close and turning to Slide 13 on guidance. We maintain full year 2026 guidance at this stage. The business benefits from a record backlog, strong project execution, resilient contributions from our recurring income portfolio and a strong balance sheet. We will continue to assess as market conditions evolve, and we will come back in Q2 with any further guidance updates. Looking ahead, we remain committed to deploy capital in a disciplined manner, maintaining our prudent leverage profile, strengthening recurring income and aligning our funding strategy with long-term value creation. And with that, we conclude today's presentation, and I welcome your questions. Thank you very much.

[Operator Instructions] Our first question is from Charles Boissier from UBS.

So three questions from my side. First on the guidance. So you reiterated 2026 development sales. Guidance of AED 45 billion to AED 49 billion despite the slower launch pace in Q1 that you mentioned. So what are the launches you're planning for the rest of the year? And how much risk do you see in not hitting the sales guidance? Similarly to that, how confident are you on the 37% to 39% profit margin as you're potentially shifting a little bit the type of product you're putting to the market. And still on guidance, you reaffirmed also the Vision 2030, but you did not explicitly I think, restate the medium-term guidance to 2028, unless I missed it. So to what extent are you also reaffirming this 2028 guidance? I have potentially two more questions after.

Okay. On the first question on sales. I think we started Q2 with a very, very positive launch with the Yas Park Place. I think that brought a lot of confidence to the market, as you saw more than 80% of the inventory that we launched was sold at very healthy prices as well. So we sold at almost AED 2,700 per square foot. So we've actually somewhat increased prices slightly versus our previous products. Now we want to continue launching a disciplined manner. We'll come back to you guys in terms of what exactly we're launching, but we want to focus on the products and on the price points and on the locations where we will see the most significant demand. For example, and I mentioned this in the past, our project in Dubai, which we secured with the Dubai Holding earlier in the year, opposite [indiscernible] opposite Muhammad Bin Zayed Street across from Zayed Bin Hamdan Street. That master plan is predominantly townhouses. So that's something that is still actively in play and the plan is to launch that during this year. We want to launch more townhouses in Abu Dhabi. We want to launch more things on Yas. So we are surely continuing with our launch activity. In terms of the risk on guidance. Where we stand today, you're right. It does look challenging, achieving the guidance as it is, but it's very difficult to say where it is going. And so I wouldn't throw the towel yet, which is why we have not updated the guidance. In terms of the profit margin, and the guidance on that, I guess the question is directly related to the supply chain. There's been obviously considerable increases in prices, be it diesel prices, be it commodity prices. Now more than 85% of our backlog is already awarded and contracted. We have fixed price contracts with our contractors. In reality, if contractors start feeling the pain, we're going to have to share some of that with them so that they do continue those projects. But we have not come to that yet. So the biggest question and the biggest risk today is how long is it going to take before the Strait of Hormuz opens, because, yes, if it does prolong, then that might risk the speed of our ability to get value of work done and our ability to procure at the right prices. However, we have taken a very proactive measure today where we have engaged with a lot of our contractors. We've done a lot of forward purchasing to secure a lot of the material that is already inside the country. To give you some context, we are one of -- not only one of the largest procurers of contracts in the city. We are also one of the largest procurers as part of the In-country Value Program that is sponsored by the Ministry of Industry and Advanced Technology. So we source a lot of the material from inside the country. Since that program started in 2020, we have procured more than AED 67 billion of in-country value procurement. Last year by itself, that was AED 30 billion. So despite what you read in the news and the charges that will come, I think the UAE has built a very resilient in-country industrial capability. And we are managing through different ways. So we are exploring getting -- we're not exploring. We are actually getting material through land for Saudi, through [indiscernible] its a the risk, but it has not materialized yet. And if the closure of the Strait of Hormuz does take a little bit of time, then we might start feeling the pinch. But at the same time, on our side, we have been implementing a lot of things to make sure that we continue elevating our margins, and that includes standardized designs, having better negotiated framework agreements, strategic sourcing, so that's on the margin. So I would say, I don't think there's a risk on the margin as it stands. And then the last thing on the medium-term guidance, if you have a crystal ball, then please let me know because we're all sitting here and just wondering when the Strait is going to open. I think that's the biggest question that everybody needs a clarity on before they start giving direction on how the future looks.

Yes. Very clear. And no, I don't have a crystal ball, sorry. And then just my last question then, not to occupy too much time is the backlog, so you mentioned that the default rate was very low at around 1%. And also you mentioned the collection was relatively resilient, I think. So if you were to stress test on the default rates, what -- where do you potentially see it going?

So we've done that stress testing. And the way we assess the risks of the project is we put them into buckets. The more we have collected on the project, the less likely the customer is going to default. Like if the customer has paid 30%, 40% already of the project, it is very unlikely that the customer is going to default because he's going to have to give up a big portion of his equity. The second thing we look at is how much in the money is the project and a significant amount of our backlog is significantly in the money. And that also makes it the more money the customer is sitting on, the more likely that the customer is not going to default. And then we look at things such as how much is the percentage of nonresident buyers? How much is the construction progress on the project, the more construction, the less there's default, and then we start putting them into buckets. Low risk, all the way up to high risk. Obviously, the low-risk projects, we assume a 1% default, and then the higher risk can go up to 5% or 10%, just to be conservative. And even with that stress test, we are more than okay. And the reason we are okay as we are sitting on more than AED 20 billion of cash in escrow, and we have more than AED 18 billion of committed funding facilities from the banks. So we are more than okay on that front.

Our next question is from Rahul Bajaj from Citigroup.

Rahul Bajaj from Citi here. Faisal, two questions from my side. The first one is on sales promotions over the last month, 1.5 months. Have you moved or have you started any form of kind of sales promotion to push sales compared to February levels. And if yes, will that continue in the near future? And what kind of impact should we expect from those promotions on your P&L. So that's kind of my first question. My second question is on trends in April. We've had one full month of April now almost. Have you seen -- you mentioned about the Yas launch, which has taken very positively. But beyond that, how have you -- have you seen any difference between the March trends and the April trends in terms of activity on the ground? And more importantly, I also wanted to understand, have you seen any difference between activity on the ground in Dubai versus Abu Dhabi? i.e., how customers in Dubai are behaving versus customers in Abu Dhabi. Is there any difference over the last 1 month, 1.5 months in terms of customer behavior?

Thank you, Rahul. So on the sales promotions, no, there's no impact to P&L. And I'll tell you why for every project, we budget for a commercial costs. So things such as ADM fee waivers, rebates, et cetera. And we typically accrue for those budgets. So it's already part of the P&L so that whenever we have any remaining inventory, we start activating those campaigns. We don't do it during the initial launch. So you would have seen some of those campaigns going out, all of those campaigns were on off-plan inventory. So things like stuff we have on Saadiyat and Fahid, which was launched predominantly from last year. The second thing we did, Yas Park Place, we did a 50-50 payment plant. We typically do 60%, 70% during construction. We felt that this was the first launch post the recent events. So we really wanted this to be a very successful launch and to bring the confidence back to the market. But -- this is not the norm that is going to continue going forward. We will maintain discipline on payment plans going forward. In terms of the trends in April, we have surely seen a pickup in activity, especially on inventory sales. So it's not only been the Yas Park Place that we've been selling, but we really started seeing inventory starting to move in April. I don't think we have the right data for Dubai yet because we haven't launched anything compared to Abu Dhabi and we don't have as much product in Dubai as much as we do in Abu Dhabi, but we are seeing some decent amount of activity in Dubai as well, nevertheless.

Our next question is from Taher Safieddine from JPMorgan.

This is Taher from JPMorgan. Congrats on a solid step. Just maybe two questions. The first one is on the development, maybe a few questions here. If we look at March, April sales trends versus Jan-Feb, can we get an understanding in terms of magnitude? I mean, clearly, Jan-February pre-conflict were very strong. So I just want to understand like how is March and April looking versus Jan-Feb? If you don't want to maybe share numbers just in terms of growth or any level that could actually help us better assess, that would be my first question. The second question, I've noticed in the presentation that the launches you've done in Q1, which I'm assuming we're in January, February, there's a very low sales ratio on these projects, including The Baccarat and the project in Dubai. Is there any reason for that? Maybe if we can get just a better clarity? And the third part is if you are in this status quo, clearly, maybe ceasefire, getting extended, no final resolution. How should we think about pre-sales going forward? Are we expecting a new norm, which is much lower than the pre-conflict? Or you think confidence will come back. I'm just trying to -- I know we don't have a crystal ball, but if we are at this...

Pre-longs, Taher or gets resolved do you think...

So it is just status quo, as we are today, continues over the next few months, how would the picture change for you in terms of off-plan sales, would you become maybe more aggressive to drive volume? Do you think sentiment will -- people will get used to it and then we get some normality. I'm just trying to get maybe your thoughts in terms of how you think presales trends will move, assuming we remain in this position over the next couple of months, and we don't get a full resolution of the conflict?

Okay. Let's start with the sales. So January and February were extremely strong. The biggest drivers of sales and you can see in the numbers came from the likes of The [indiscernible] on Saadiyat and Fahid, for example. March, again, despite the government doing an incredible job to bringing back life to normal and economic activity to normal, it was challenging in terms of sales. because people took the approach of, let me wait and see. So we had a number of bookings, for example, that were canceled. They were not booked SPAs -- signed SPAs, they were bookings. So March, I would say, was somewhat of a challenging month. But now with April, I think we are seeing a very good amount of activity. I'll skip to the third question and then come back to the second. If things stay as in before the Strait opens, and there's complete clarity that this crisis is over, I think it will be challenging to hit the sales target because we will not keep launching and building up inventory, right? If we're not selling at the velocity that we want to sell out. So we will moderate our launches if the situation continues to be as is. I think what is needed is [indiscernible] for the Strait to open and for this to be resolved. And History tells us that the rebound tends to be strong, and that's what we're backing on. On your second question on Baccarat and Wilds, I guess we were a little bit unlucky because we launched both of those on the week of the conflict. And that's why the sales on those projects has been somewhat lower. So I think the direction on those is we're going to have to start relaunching those projects to make sure that we do bring the sales on those projects at the right level.

All right. Okay. Very clear. Maybe just my next question is on the Investment portfolio bucket. Clearly, you've been active despite the conflict in terms of announcements on the hold and the acquisition. I just want to get understanding on the residential leasing portfolio. You've done two deals in the last couple of months. Maybe just help us understand the economics of this, what kind of yield should we expect? I know there are more on the affordable side, compared to what you have in your portfolio. So if you can maybe just help us understand what kind of yield should we be looking at on that? And I was also along the same lines, do you think the dip in EBITDA in Q1 year-over-year for the Residential Leasing we can actually revert back to growth once the bulk lease gets back into the mix? If you can just maybe also elaborate on that. And finally, just on the hospitality. I know it's very tricky. Q1 maybe doesn't tell the full picture because you had a very strong Jan-Feb, but as we are looking into Q2, are you seeing any light at the end of the tunnel in terms of maybe improved occupancy? Is there anything you can share with us in terms of how you can protect this portfolio or minimize the losses because we know that inbound is -- is very subdued compared to pre-contract levels.

So first question, for [indiscernible] the projects we announced with the [indiscernible] as part of the value housing program, one in [indiscernible] and one in [indiscernible] -- the way that works is the government contributes the land under [indiscernible]. So that's somewhat -- the performance of subsidy from the government. And then the rental product is a regulated rental product. So people who are within a certain bracket of income, call it high level, somewhere between AED 5,000 to AED 20,000 of income a month. Those are the people who are going to be eligible who live in those units. And then they will migrate how much rent escalations we can make on that portfolio. Nevertheless, the return on that portfolio continues to be very commercially driven. So we expect IRRs in the high single digits. Therefore, yield should be no less than 9%, 10% as well. So it's actually a really good defensive portfolio with a strong captive audience because remember, a lot of those people today are not living in the suitable units, a lot of those bachelors and stuff, there's a bit of unregulated accommodation activity happening. So this is -- maybe it's not as s*** as other stuff that we do, but it is one of the most defensive asset classes that we're excited about. And this asset class is one that is very suitable for third-party capital raising as well with a capital in the future perhaps. That's an idea that we're floating. On the residential portfolio, we've seen a drop because -- so we have Yas Park Place, which is a staff accommodation assets. And we had a bulk lease of a number of units that expired and the tenant vacated. So it's not like your typical residential units where you can find anybody to occupy, you really need to find a specific corporate tenant that needs 25 or 30 units or whatever, which is why you've seen a drop. The second thing is Eastern Mangrove, where we've been refurbishing that asset. So we've been asking tenants to vacate, but that's going to hopefully significantly pick up towards the end of the year. The nice thing about the venture portfolio is it remains significantly under-rented. So I always say the upside case for us is when the tenant vacates because then we need to we can revert back to ERPs. So today, we're sticking to our contractual 5% escalation year-on-year when the renewals come up. But whenever the tenants vacate, then we can get a further upside on that front. Hotels. So March was difficult, but it was supported by a large number of groups, which were mainly the people who were stranded obviously here until the flights open again. And we got quite good business from the government on that front. We have started consolidating operations. We have not fired anybody. We have not cut salaries, but we're consolidating operations, especially across the clusters that we manage, like Yas Plaza, we don't need to manage -- we don't need to open 6 hotels at the same time. So we are trying to cost-optimize as much as possible. Now the trends we are seeing, is in the weekend, you see occupancy shooting up to 70%, 80% because we have a lot of [indiscernible] happening. Again, personally, I'm taking advantage. Last weekend, I took my family out for a 3-day weekend. I think a lot of people in the UAE are taking advantage of the great place that you can get there in the market.

Our next question is from [indiscernible] from Jefferies.

I have just one on your preparation with the government. Could you please elaborate a little bit more how it's evolving? Should we expect maybe some additional reforms or support measures for the sector over the course of this year for example, regulatory easing mortgages for off-plan, further subsidies for the hospitality or step up in infrastructure spending that can support your project management services?

I don't want to speak on behalf of the government because I'm not an official spokesman. But again, I'll refer to history and say the UAE has consistently had a playbook where in such events, it always comes with pro-economic and pro-business policies, and we already started seeing some of it, right? So even though the company continues to have very strong reserves, the Central Bank came out with their announcement. I think it was a few weeks back. You saw his highness Sheikh Mohammed announced the AED 1 billion industry and resilience fund and the expansion of the ICV program across different sectors. I think in Dubai, there's been a number of fee waivers for businesses. So watch this space. We are obviously advocating. The way it works in this country is leadership are very accessible and as businesses, we always go back to the right stakeholders with what we call white paper. And we propose things to the government where it could really help various sectors. So I'd say watch the space, there's surely more that's going to come out during the next few weeks and months.

Our next question is from Mohamad Haidar for Arqaam Capital.

Mohamad Haidar from Arqaam. If we wanted to be conservative and assume that it's going to take a few months for the situation to be resolved. How should we think about your capital deployment strategy? Would you shift away a bit from D-Hold into M&A if you think more opportunities are going to arise. And are you actually seeing any motivated sellers in the market today, people willing to sell assets maybe at higher yields today above 8%? So that's one. Two, on the new [indiscernible] logistics assets in KEZAD, I slightly implied lower price versus the 2 assets previously acquired, 4% lower. Is it because the assets are different or because prices were down in April?

I'd say no, we're not diverting away from D-Hold. I think the challenge has always been finding enough ready-standing assets. The more you can find, obviously, we're going to buy ready-standing assets. And I think during fire chats over the past 2 months, I've mentioned that we are not changing track and we demonstrated that. We did AED 1.2 billion of acquisitions. One was the Masdar asset, and the second was KEZAD and we still have a pipeline, and we're continuing to be very committed to deploying the capital that we are guiding, we're going to be deploying. Are there opportunities that are coming out, the stress. I think it's a little bit too early. Those things take time, especially in those situations. I think people try to avoid selling distress. But we are on the lookout. If you find anything, please let us know. On KEZAD, no, the pricing has not gone down. It's just the different type of assets. So the age of the assets comes into play. Therefore, the rent comes into play. The previous deal was 2 large tenants, build-to-suit. One was Noon and the other was [ M-Still ], I think, I can't remember the name. In this portfolio, it's a number of tenants. I think they are at least 80 or 90 tenants. So it's a very different portfolio. It's not that the pricing has gone down.

Our next question is from Steve Bramley from HSBC.

Thank you very much, and good afternoon, everybody. And a couple of things, firstly, a great set of results. Secondly, commend you on your continuation of your operations and the -- the military defense of the country, fantastic. I had a couple of questions for you operationally. Fasal, if I may. Firstly, your sort of entry into Dubai, you've extended your arrangement with Dubai Holdings. Is that your only avenue into Dubai? Is it proving quite challenging? And using that avenue does it change the economics at all? That's my first question.

Why, you don't like that avenue, Steve?

No, it's a great -- it's actually a great avenue. But I'm just curious because...

Let me answer that question and then go to the second question. So I think Dubai Holding, obviously, being one of the largest land owners in Dubai, gives them a very competitive advantage in terms of having the best sites. And we want the best sites that are in the best growth corridors with the right sizes. So we don't buy anything that is smaller than 1 million square meters of land. And I think we're getting those opportunities with Dubai Holdings and given the reach that they have in Emirates, they've obviously been quite supportive in terms of helping us expedite the approvals of those projects and getting them out to market at the right time. So it's surely been a win-win situation. Is it an exclusive relationship? No. We've looked at stuff in the market, but we have not seen the right price. And obviously, land prices have gotten a little bit [indiscernible] in Dubai, which is why it's taken us a little bit of time. To conclude on this, I don't think we're going to be buying more land in Dubai for the timing. I think we're sitting on enough land for the next 2 to 3 years in Dubai, unless something really attractive comes up. But for the time being, we're not shopping and we're not looking.

No, I think -- okay, I tend to agree with that. I think that's a great answer. So okay. So outside of that, the problem we have, I think, basis, what we call buy-side and the investors. Just trying to sort of rightsize your launch program for 2026. So just trying to think how you are budgeting how you are kind of underwriting your year ahead? I mean if we thought you would launch, I don't know, just to throw a figure out there, 50% of what you did last year. How does that sound? Does that sound kind of like unrealistic or realistic? What do you think, Faisal?

I think you can put it into Claide, and you'll probably get a better answer than you will from me.

All right. See -- you won't respond or you I mean, you guys have to think about...

It's very difficult to say today, Steve, but like the situation is still evolving. And like I said, we are surely planning to continue our launch activity have we quantified exactly how much we're going to launch for the remainder of the year? No, which is why we said we are maintaining guidance and we'll come back to the market back in Q2 to see how things evolve.

Yes. Okay. That's fair enough. I completely understand. It's a day-to-day thing is that. Just outside that, just outside that, I know it's quite a small part of your business. So you had 3 -- in London Square -- you had 3 launches in the first quarter. I mean, the U.K. market is pretty difficult, actually, not too complex. This is a difficult per se. How do they go? Is that -- were they quite good launches? What was the outcome there?

I think we've had good sales at the beginning of the year, obviously, in January and February. But the recent events were not constrained to the UAE, right? It's affected sentiment globally. So again, in March, we did see a slowdown on sales as everybody is just waiting and seeing what's happening.

[Operator Instructions] We will now move on to the text questions. So our first question reads, can you disclose how many units were sold in Yas Park Place in April?

Over 430 units.

Our next question reads, the International business and project management revenue fell despite high backlog. Any seasonality involved? And on the launched project in Feb of 2026, you've sold only 3% from The Wilds and 6% from The Baccarat project. How the sales of the project in April?

So let's start with international. So LSQ reported a positive EBITDA -- you can see the numbers in the investor presentation, but from memory, it's something around AED 30 million, I believe. Saudi at their level, reported a positive EBITDA. But at our level, given we were the acquirer of that business. We had a one-off unwinding of PPA that made it go negative. So that's on the international business. On project management, the government business, the fixed price business is going very well. We had a one-off provision on one of our projects in the fixed price segment, which moderated the growth in that segment, but that should not continue going forward. It should start normalizing throughout the year. In terms of sales, I think it's early to comment in terms of where are those projects today. But as I've noted, we've seen a significant pickup in activity during April.

We have a follow-up question from Steve Bramley from HSBC.

Okay. Thank you very much. Thank you. Faisal, in retail, you have a combination of fixed rents and turnover rent. One of your competitors, all of their turnover rent sits within the high-end luxury, which apparently is a little affected. And I'm just curious as to -- although your footfall return, what's happened to your turnover end? Is it similar situation or different?

So turnover rents make less than 10% of the revenue of the Retail business. And typically, what happens, and it's the same with our competitor. Every time there's a renewal cycle they convert the turnover rent into baseline, based on the previous years, right? So that takes the risk away from the turnover. Now -- it's the first time that we have the Luxury in the portfolio with the addition of Galleria, I'd say sales across the portfolio Luxury are almost 10% to 15% below historical level, which is really good in our view, like things have really revered quite well. And then Luxury, I would say somewhere around that 20%, 25% level, but it's picking up also.

Our next question is a follow-up question from Mohamad Haidar from Arqaam Capital.

Faisal, are you willing to revise the payment plans on the new launches, specifically versus the previous plans? And at some point, would you be willing to offer extended payments post handover payments, at least on the unsold inventory, which is completed, are you considering anything on that front?

Let's start with the latter. No, we are not doing post handover payment plans. And with the inventory that we have today, the off-plan inventory. That inventory still has 2 to 4 years before it's delivered. So we have a lot of time before we start considering such measures. And we've done it, I think, once in our history in the past, -- and I don't think we've ever thought about it during this time. Are we considering revising payment plans? Do you mean on new projects that we're going to launch during the year?

Or the ones that you launched in March and April, are they still on 60-40, 50-50?

We did some promotional stuff on the inventory again. But no, we're not revising payment plans as we speak. Those were exceptions on a very limited number of units where we are more than 90% sold on the project, for example, and that project had the 60%, 70% payment so then we offered a 50-50 or 40-60 on a very exceptional basis. And then on our new projects, pre-day events, I would say we were working towards getting to 70-30 on average. I think now we're going to have to continue working towards this. I don't think we're going to go there. We're going to have to be a little bit more lenient on that front. And I wouldn't take the Yas Pakr Place as the norm going forward.

Our last question is a follow-up question from Taher Safieddine.

Again. Just maybe two follow-ups. The first one is if I look at the Q1 '26 sales demographics, clearly, there's a very high share of foreigners and resident expats. But if I recall [indiscernible] the space, we've seen a significant uptick in UAE national share. I just want to understand how -- how do you read this? I mean foreigners are taking more of a wait and see, are more cautious and -- could this be the new norm assuming that the contract does not get resolved if you are thinking about new launches over the next couple of months. How would that -- how much more can the international buy? Because I mean, clearly, the growth driver, I would say, over the last couple of years has been the resident experts and the increased share of overseas buyers. So maybe if you can just share some color there just building on the Yas Park Place experience.

Let's start with Q1. So Q1 was a reflection of the type of product that we launched, which again was predominantly driven by The [indiscernible] and Fahid. And like last year, when we started Q1, we kept getting the question, "Oh, are you seeing a change in demographic and the feedback we gave was no, with for the full year and the full cycle of launches across products and locations to materialize for you to have a better representation of the mix, which ended up being very similar to 2024, '25 versus '24. Yas Park Place, I mean, still had 20% -- sorry, it's a 20% overseas investors, which is almost in line with what we did for the full year last year. We were just slightly above that, I think 24% or 25%. The third thing is, I would say, we've always said in Abu Dhabi that Imaratis are a very important customer demographic, and they represent a bigger base of our customers in Abu Dhabi than Dubai because obviously, the market in Dubai is more driven by resident experts and overseas investors. It's a much larger market than it is in Abu Dhabi. So I would say, on the contrary, I take it as a very strong positive that you have people who are buying because those guys are end users. So no, I wouldn't take it as this is a reflection of a change in the mix and that people are hesitating. And the last thing I would say is we were focused intentionally very much on the local market. So during the first week of the launch, we did not go out to our international process strongly. We focus on the local market -- and after that, now we're starting to promote to the international markets more.

All right. very clear. Just the second question is on the Education portfolio. I mean, clearly, I think the managed portfolio has been coming down in terms of the number of of schools. But just maybe two questions here. Do you have any visibility on re-enrollment for next year? I mean you said 99% of the students returned for term 3, but is there any clarity on re-enrollment for the new academic year in September 2026 that you can share? And the second question on that is, how should we think about the Education portfolio? I mean adjusted EBITDA growth is at around 8%. There is still definitely some margin drag, I'm assuming because you're ramping up a lot of news, but -- can you just help us understand where should we see that education portfolio in terms of number of students, maybe capacity utilization, like given that you're almost coming to the end of that expansion plan as it is now, you've opened a few brownfield, greenfield schools and there's upcoming things [indiscernible]. So maybe if you can just put all of this together to help us understand the scope for this portfolio?

The first thing I would say is more than 99% of the students coming back as a very positive signal. We would have always said that one of the most interesting things we have in the portfolio, this gives us a sense of the health of the economy. And there was a lot of drama about people leaving the country and not coming back or again, more than 99% of the students came back and almost 99% of the teachers as well came back. So I take that as a very strong positive. Now you are right. There's a big question on what are the enrollments going to be in the next academic year. And I think until things are clear, that will remain to be a risk. And so we'll have to wait and we'll update you guys in Q2 in terms of how we see things going. The margins have had somewhat of a drag, you're right. And if you see the investor deck, we break down organic growth versus D-Hold and acquisition growth, which is predominantly D-Hold growth on the new schools. The growth organically has been very strong. We've had some drag from Yasmina British, for example, sorry, Yasmina American Academy. But no, we're not slowing down. The pipeline of new schools that are coming is not going to stop. Obviously, we still have Kings, which we've announced -- there's a plan for something else on Saadiyat. There's still a plan and an ambition to do something in Dubai. I think the pipeline that we announced a couple of years back was to hit at least over 60,000 students over the next few years. So no, that portfolio is one of the most exciting businesses that we have and one of the most passionate portfolios that we are about.

I will now hand back to Faisal Falaknaz for closing remarks.

I want to thank you all for your engagement over the past 2 months or so, especially on the fire chat. We appreciate the time you guys invest with us to understand how the business is doing. We remain to be very optimistic despite all the headlines you read in the news. Again, we've always said that when there's difficulty that's going to come and the market goes through cycles. This was one of the global events that nobody would have expected. We were going to easily weather it out, and we continue to say the same thing. We are easily going to weather this out. We have very strong liquidity. Our recurring income portfolio. We are confident this year is going to perform extremely well. Hopefully, the Strait of Hormuz is going to open up, and we're not going to have as much risk on delivering on our development backlog. And then we'll have to see what happens on our sales, but we'll keep you posted. And thank you.

Thank you. This concludes today's Aldar Properties Q1 2026 Financial Results Call. Thank you for joining. You may now disconnect your lines.