Abu Dhabi's Aldar Properties will introduce a new formula to calculate its dividends from 2016 onwards which could lead to higher payouts for shareholders, its chairman said on Wednesday.

Aldar's new dividend policy is based on the underlying cash flow performance of its business, the company said in it annual report published on Wednesday.

Dividends will be made up of two parts. The first will be a payout of 65-80 per cent of distributable free cash flow derived from its wholly owned investment properties, plus a discretionary second part based on cash profits from the completion of newly-built developments.

"There is a formula for dividend payouts from now on and dividends will grow as the company grows," Aldar's chairman Abubaker Al Khoori told Reuters on the sidelines of the firm's annual shareholder meeting.

Aldar, which will pay a cash dividend of 0.1 dirhams per share for 2015, up from 0.09 dirhams per share for the prior year, has increasingly focused on its leasing business in recent years, retaining ownership of some of its developments to rent out residential, commercial and retail units.

These provide recurring revenues, which are considered more stable than those derived from build-and-sell property development.

Aldar's annual net profit for 2015 was Dh2.56 billion ($697 million) in 2015, up 13 per cent year-on-year, while its 2015 gross profit from recurring revenue was Dh1.51 billion ($411 million), 49 per cent higher than 2014.

"In our business model, we have much more recurring revenues which are more visible," chief financial officer Greg Fewer told Reuters when asked if Aldar's profit growth this year could match that of 2015.

"Our recurring revenues are producing strong profits and (we) see them continuing in 2016."

Abu Dhabi house prices were flat last year, while apartment prices rose four per cent, industry consultants Asteco wrote in a February report.

This forecasts the property sector would see a noticeable slowdown in the following 12 months as the government cuts spending following the sustained slump in oil prices and as salaries stagnate.-Reuters