Stock - Alpha Dhabi
Alpha Dhabi continues to deepen its holdings in Aldar Properties. Image Credit: WAM

Dubai: Alpha Dhabi Holding has increased its stake in Aldar Properties, whereby the Abu Dhabi mega-developer will be a full-fledged subsidiary of the former. A subsidiary status is when the shareholding held by a company in another entity touches 50 per cent, either directly or indirectly.

“We are firm believers and supporters of Aldar’s equity story, vision and strategy as well as the positive and strong strides it continues to make in growing and scaling its platforms,” said Hamad Al Ameri, CEO of Alpha Dhabi Holding. “As a long-term strategic shareholder, Alpha Dhabi will continue to support Aldar’s management team as they execute its transformational growth agenda.”

Aldar and Alpha Dhabi stocks gained over 2 per cent in the morning session on ADX. Aldar shares closed 3.66 per cent higher, while Alpha Dhabi ended the day with a 2.41 per cent gain.

It was always a given that Alpha Dhabi would incrementally raise its exposure in the developer, according to analysts. Last year, it bought major chunks in Aldar through two deals.

Through the latest stake purchase, Alpha Dhabi complements its existing majority representation on Aldar’s Board of Directors. Aldar will be treated as a subsidiary in Alpha Dhabi’s consolidated financial statements, the ‘impact of which will be reflected in its financial results for Q2-2022 onwards’. 

The additional shareholding came through the acquisition by Alpha Dhabi of an entity already holding shares in Aldar, which comes after necessary regulatory approvals.

It was earlier this year that Alpha Dhabi – which has extensive real estate and hospitality interests – confirmed its shareholding in Aldar had touched nearly 30 per cent after earlier buying 12 per cent. 

"The macro-economic environment across the UAE and the region remains strong, supported by a rise in oil prices and with it, sustained economic growth,” the CEO added. “There have been a number of economic, social and regulatory policies and initiatives that have bolstered the UAE’s status as a premier destination to live, work and visit, thereby increasing the demand for real estate.

“The result is an in-demand asset class across the UAE, the key market in which Aldar operates, as well as new markets it has recently entered into such as Egypt.”

Aldar's getting started on next growth phase
Aldar recorded its highest-ever yearly development sales in 2021, doubling on 2020's numbers, and expanded its land bank in the UAE. It entered the 'high-potential' Egyptian market as well as went into diversification within the UAE through its expansion to Ras Al Khaimah.

The Abu Dhabi company also made an entry into logistics real estate, and with regional expansion plans in place. There were also investments from global fund manager Apollo, which recently channeled $1.4 billion through a monetisation of Aldar’s long-term land bank and equity investments into its flagship investment properties platform.

This funding as well as existing cash and facilities will be deployed to realise the company’s growth ambitions.