ADNOC inks $5.5b real estate deal with institutional investors

Dubai: Abu Dhabi National Oil Company (ADNOC) on Wednesday said it has signed a deal with Apollo Global Management and a group of institutional investors for an underlying real estate portfolio valued at $5.5 billion.

The investment will leverage the rental income streams from select ADNOC real estate assets under a 24-year master lease agreement. The move is expected to unlock “new pools” of global institutional long-term capital for UAE’s state-owned energy giant, while supporting investment in its core business and strategic growth projects.

“This strategic partnership allows ADNOC to unlock and monetize significant value from its non-oil and gas strategic infrastructure assets and reinvest into our core business to deliver further growth and realize greater returns,” said Sultan Al Jaber, UAE Minister of Industry and Advanced Technology and ADNOC Group CEO in a statement.

The Apollo led consortium of institutional investors took a 49 percent stake in Abu Dhabi Property Leasing Holding Company RSC Limited (henceforth referred to as “ADPLHC”), a wholly owned affiliate of ADNOC. ADNOC will retain its 51 percent majority stake, maintaining full ownership and control over the select real estate and social infrastructure assets and responsibility for all operations and maintenance.

The transaction, one of the largest in UAE’s real estate industry, will result in upfront proceeds of $2.7 billion to ADNOC and is expected to close before year-end, the company said in a statement.