As Yas Viceroy Abu Dhabi breathes a sigh of relief in the aftermath of its most important weekend of the year, the Formula 1 Abu Dhabi Grand Prix, Hotelier catches up with Jahed Rahman, who heads up the hospitality & leisure division of the hotel’s asset manager, Aldar Properties.
Rahman explains why leveraging events such as the F1, and an ever-growing portfolio of leisure assets will be key to establishing a solid revenue stream
With the sell-out ‘race weekend’ hot on the heels of the opening of Yas Mall in November — Abu Dhabi’s largest shopping and entertainment destination — Yas Island has not only stolen the regional spotlight over the past month, it has taken the global stage.
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Behind the island’s fast-growing leisure assets and world-class events is the hospitality & leisure division of Abu Dhabi’s largest property company, Aldar Properties, which was formed following the firm’s merger with Sorouh Real Estate in 2013 after a $10bn state bailout in 2010 rescued it from a market crash.
Young London investment banker Jahed Rahman was brought on board to assist, and following completion of the merger he stayed behind, seconded from his position at financial services company Credit Suisse to continue helping with the integration of the two firms. Under the advice of Rahman and the other bankers involved in the merger, Aldar Properties became a development management and asset management company.
Rahman was appointed as director of hospitality & leisure, Aldar Properties PJSC in the summer of 2013, and has since led the company’s active approach to growing the hospitality and leisure portfolio. The division currently owns and operates nine hotel assets across Abu Dhabi, located within Yas Island, and in downtown Abu Dhabi and the Western Region.
The portfolio encompasses 2536 keys, 2259 of which are situated on Yas Island. It also includes a number of leisure assets comprising Yas Links golf course, Yas Beach, Bandar Marina, a residential marina serving the Al Raha Beach community, and the new Yas Mall, which fills a gap in Abu Dhabi’s retail offering.
“The reason for the split is that during the merger and for a number of strategic reasons, we had held on to several assets over the last three or four years since developing,” Rahman tells Hotelier during our interview, which takes place in the presidential suite of the Yas Viceroy.
“Development companies cannot just be development companies if you want to have a stabilised share price. You need two revenue streams: one that is the big catch every time you sell apartments, villas, and the second bit, which is effectively asset management,” he explains.
“The steady stream of cash comes in because you’re letting offices, you’re letting residential space, and hotels that bring in revenue and so on and so forth.”
The hospitality and leisure division is now core to the company in that it not only diversifies revenue streams, but also increases the value of Aldar’s residential portfolio.
“All around the world people like living next to hotels and golf courses, so it’s not just a matter of ‘here’s a hotel to make money out of’, and of course we’re very focused on revenue management and yield management and on a return to our shareholders, but we also want to give back to the community and create value for the community, so those are the reasons why it has become a core focus,” says Rahman.
While in the past, affiliated operators were seen by the company as “service providers”, today Rahman claims they are “partners”, since the company’s asset management has become more of an active function than before.
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