Dubai: The Abu Dhabi Pension Fund has concluded its biggest real estate focussed deal to date with ADNOC. It is also the fund's third transaction with Abu Dhabi's energy giant.
Under the terms of the agreement, ADPF will acquire a 31 per cent holding in Abu Dhabi Energy Real Estate Company – Sole Proprietorship llc (Adrec) for $900 million. The latter company was created to hold ADNOC’s 51 per cent stake in Abu Dhabi Property Leasing Holding Co. RSC ltd.,
It follows the announcement by ADNOC - Abu Dhabi National Oil Co. - in September that it had entered into a long-term strategic investment with entities owned by New York Stock Exchange listed Apollo, one of the world’s largest alternative investment managers, and a group of institutional investors, for an underlying real estate portfolio valued at $5.5 billion.
Network of shareholdings
ADPLHC was created to leverage rental income streams from select ADNOC real estate assets under a 24-year master lease agreement. ADPLHC holds long-term lease-hold interests underpinned by ADNOC's real estate assets across Abu Dhabi.
$5.5billionUnderlying value of ADNOC's real estate assets
Following the completion of the transaction, ADNOC will hold 69 per cent and ADPF 31 per cent of ADEREC, whilst Apollo and its subsidiaries will continue to directly hold 49 per cent of ADPLHC. ADNOC will maintain full ownership and control over the select real estate and social infrastructure assets, as well as responsibility for all operations and maintenance.
“The creation of our real estate investment partnership with Apollo last year enabled ADNOC to monetize its non-oil and gas strategic infrastructure assets and reinvest the proceeds into our core business to deliver further growth," said Dr. Sultan Al Jaber, UAE's Minister of Industry and Advanced Technology and CEO of ADNOC Group.
"The partnership structure continues to ensure that ADNOC maintains full ownership and control over our real estate assets, while further strengthening our balance sheet and allowing for greater capital flexibility.”
- Since 2017, ADNOC entered the debt capital markets for the first time;
- Issued a $3 billion bond backed by the Abu Dhabi Crude Oil Pipeline;
- Partially floated ADNOC Distribution, which was the first-ever IPO of an ADNOC Group company;
- Entered strategic investment partnerships in its drilling, refining, fertilizer and trading businesses; and
- Struck partnerships with global institutional investors and operators in its oil and gas pipeline infrastructure.