UAE’s Aldar to receive $1.4bn investment from Apollo Global Management

Alternative investment manager Apollo Global Management will invest a total of $1.4bn in Abu Dhabi-based Aldar Properties.

As part of the transaction, which is expected to close by the end of the first quarter, Aldar will receive major cash proceeds that are earmarked to drive its targets, as it aims to to accelerate the effective deployment of capital across its pipeline of development and value investment opportunities.

The commitments are structured in the following components: $500m into a land joint venture; $500m perpetual subordinated notes issued by Aldar Investment Properties; $300m mandatory convertible preferred equity investment in Aldar Investment Properties, and $100m common equity investment in Aldar Investment Properties.

The $500m land joint venture will allow Aldar to realise long-term value tied up in its vast landbank, while maintaining flexibility to develop or sell the land.

Talal Al Dhiyebi, group CEO at Aldar Properties, said: “This landmark transaction is a signal to the world’s investment community that Abu Dhabi’s real estate market is on a growth trajectory, supported by significant economic and social reforms, and a world leading response to Covid-19.”

“Aldar’s ability to attract a long-term partner such as Apollo underscores the strength of Aldar’s business franchise, as well as the quality and investment appeal of the Abu Dhabi real estate market, both of which are driven by robust fundamentals underpinning long-term economic growth,” added Dhiyebi.

As part of the deal, Apollo will take a direct minority stake in Aldar Investment Properties at its net asset value, highlighting the underlying strength of its asset base and Apollo’s conviction in the company’s growth strategy, management capabilities, and ability to capitalise on accretive opportunities that lie ahead. Aldar Investment Properties is rated Baa1 by Moody’s, the highest credit rating for a non-government corporate in the region.

.@AldarTweets and @apolloglobal, one of the world’s largest alternative investment managers, have signed a landmark commitment that will see Apollo-managed funds and clients invest more than AED5bn in strategic capital to drive Aldar’s transformational growth initiatives. pic.twitter.com/B72gEz8M4X

— مكتب أبوظبي الإعلامي (@admediaoffice) February 14, 2022

Apollo CEO Marc Rowan said, “Leveraging our global integrated investment platform and permanent capital base, we were able to structure a capital solution to support Aldar’s transformational growth agenda while allowing our investors to access highly attractive, long-dated yield.”

The Aldar investment marks Apollo’s latest commitment to Abu Dhabi and the UAE. It follows on a 2020 strategic partnership with Mubadala Investment Company, as well as a long-term joint venture with ADNOC in which Apollo funds and clients led a $2.7bn investment in a real estate JV.

In other news, Aldar Properties recently announced its preliminary financial results for 2021, reporting revenues of Dhs8.58bn, up 2 per cent year-on-year (YoY), a gross profit of Dhs3.6bn, up 21 per cent YoY and a net profit of Dhs2.33bn, up 21 per cent YoY. The company also reported earnings per share of Dhs0.295, up 20 per cent YoY.

Read: Abu Dhabi’s Aldar achieves annual property sales of Dhs7.2bn in 2021