Apollo Global Management is investing in UAE real estate via a $1.4bn (€1.2bn) deal with Aldar Properties.
Apollo, investing on behalf of its funds and clients, has agreed to invest $500m in a land joint venture to help Aldar ”realise long-term value tied up in its land bank, whilst maintaining flexibility to develop or sell the land as per Aldar’s long-term development strategy”.
The global investment management firm said it has also agreed to invest $500m in perpetual subordinated notes issued by Aldar Investment Properties and made a $300m mandatory convertible preferred equity investment in Aldar Investment Properties as well as a $100m common equity investment in Aldar Investment Properties.
As part of the deal, Apollo will take a minority stake in Aldar Investment Properties.
The investment marks Apollo’s latest commitment to Abu Dhabi and the UAE. It follows on a 2020 partnership with Mubadala Investment Company, as well as a joint venture with ADNOC in which Apollo funds and clients led a $2.7bn investment in a real estate joint venture.
Marc Rowan, Apollo’s CEO, said: “Apollo is pleased to serve as a long-term capital partner to Aldar and to continue expanding our strategic investments and partnerships in Abu Dhabi, and across the United Arab Emirates.
“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.”
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.”
Jassem Busaibe, CEO at Aldar Investment, said: “Diversifying our investor base and establishing partnerships is a key tenet of our growth strategy and is essential in enabling us to build scale, enhance asset diversification, and drive earnings growth.
“We wholeheartedly welcome Apollo as a long-term strategic investor and look forward to collaborating in order to grow our portfolio through additional value and yield accretive acquisitions. This transaction enables us to add further scale to our business and forms a critical milestone of our upcoming growth journey.”
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