Apollo through its managed investment vehicles, has acquired an 11.1% minority stake in Aldar Investment Properties (“AIP”), a subsidiary of Abu Dhabi-listed Aldar Properties PJSC (“Aldar”) and the region’s largest institutional-class real estate platform, following completion of a US$ 400 million transaction. The acquisition is part of the previously announced US$ 1.4 billion investment by Apollo into Aldar’s transformational growth initiatives.
The transaction involved the issuance of US$ 400 million of common equity and mandatory convertible preferred equity at 100% of NAV into AIP, which houses Aldar’s core asset management business comprising over AED 23 billion (US$ 6.3 billion) of prime real estate assets across retail, residential, commercial, and logistics segments. The diversified portfolio has proven highly resilient through business cycles, with occupancy standing at 92% as of June 30, 2022.
By providing significant financial backing, the transaction is a catalyst for AIP to significantly scale up its real estate platform through further transformative acquisitions. AIP has been expanding rapidly this year and in July announced the landmark acquisition of four prime Grade A commercial towers in Abu Dhabi Global Market, Abu Dhabi’s financial centre, for AED 4.3 billion (US$ 1.2 billion).
Talal Al Dhiyebi, Group Chief Executive Officer at Aldar Properties, commented: “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. 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.”
Apollo Co-President Scott Kleinman, said, “This transaction provides Apollo with exposure to prime institutional real estate in the UAE through a high-quality platform. We are excited by Aldar’s strategy for continued growth, the team’s strong asset management credentials, and the prospects for significant value creation. Apollo has confidence in the UAE’s increasingly dynamic investment landscape and the robust economic fundamentals that underpin it.”
The completion of the equity transaction follows the issuance by AIP in March 2022 of US$ 500 million in subordinated perpetual notes to Apollo priced at a coupon of 5.625%. Aldar has deployed and committed over AED 11 billion (US$ 3 billion) of capital this year as part of its strategy for transformational growth, including over AED 7 billion (US$ 1.9 billion) in recurring income assets.
