Dubai: The US investment behemoth Apollo has bought a 11.1 per cent stake in Aldar Investment Properties, following a $400 million transaction. This is part of the $1.4 billion deal Apollo had announced in February in various investment and development activities taken on by the Abu Dhabi master-developer.
“We welcome Apollo as strategic investors in Aldar Investment Properties at a time when we are building significant scale, diversification, and synergies across the region’s premium platform for property ownership,” said Talal Al Dhiyebi, Group Chief Executive Officer at Aldar Properties.
Apollo, through its managed investment vehicles, has acquired an 11.1 per cent minority stake in Aldar Investment Properties, a subsidiary of Abu Dhabi-listed Aldar Properties PJSC and the region’s largest institutional-class real estate platform, following completion of a $400 million transaction. The acquisition is part of the previously announced $1.4 billion investment by Apollo into Aldar’s transformational growth initiatives.
The transaction involved the issuance of $400 million of common equity and mandatory convertible preferred equity at 100 per cent of net asset value into AIP, which houses Aldar’s core asset management business of over Dh23 billion ($6.3 billion) of prime real estate assets. In recent months, it’s been active by snapping up properties and land in Ras Al Khaimah and Abu Dhabi.
The latest was taking up four Grade A office towers in Abu Dhabi Al Maryah island for Dh4 billion plus, and making it one of the biggest real estate deals in the UAE to date. (Mubada was the seller.)
This transaction provides Apollo with exposure to prime institutional real estate in the UAE through a high-quality platform. Apollo has confidence in the UAE’s increasingly dynamic investment landscape and the robust economic fundamentals that underpin it
The current AIP portfolio has an occupancy of 92 per cent as of June 30. “By providing significant financial backing, the (Apollo) transaction is a catalyst for AIP to significantly scale up its real estate platform through further transformative acquisitions,” said a statement.
According to Al Dhiyebi, “ Apollo is a highly respected global investor, and this commitment displays strong belief in Aldar’s transformational growth agenda and reinforces the reputation of the UAE and Abu Dhabi, which is experiencing a trend of increasing capital inflows from long-term institutional investors.”
The equity transaction follows the issuance by AIP in March of $500 million in subordinated perpetual notes to Apollo priced at a coupon of 5.625 per cent. Aldar deployed and committed over Dh11 billion ($3 billion) of capital this year as part of its strategy for transformational growth, including over Dh7 billion ($1.9 billion) in recurring income assets.