Abu Dhabi-based Aldar Properties and Mubadala Investment Company have struck an agreement with US firm, Ares Management, to jointly invest $1 bn (€926 mln) in private real estate credit opportunities in the UK and Europe over the next three to five years.
As part of this, Mubadala will hold a 50% stake in the new platform, with 30% held by Aldar and the remaining 20% by Ares.
Additionally, Aldar will invest $100 mln into an existing European private real estate credit strategy first established by Mubadala and Ares in 2021, which focuses on senior secured debt with a first lien on physical real estate assets, including office, multifamily residential, industrial, retail, and hospitality.
Over time, the Ares European Real Estate Debt strategy is expected to upsize to approximately US $2 bn in capital commitments from Mubadala, Aldar and Ares funds. Including anticipated leverage, the total available capital for the strategy is expected to be in excess of $5 bn.
With a total investment of $400 mln, Aldar will broaden its focus from the traditional equity investments it is known for in the region, to diversifying its investment portfolio across the capital structure by entering the private credit space. By doing so with reputable and established players – from a funding, asset class and sector perspective – Aldar is gaining a meaningful foothold in a high growth market, particularly as the market continues to mature and in the context of the strong growth witnessed in non-bank lending.
The Ares European Real Estate Debt team is integrated into Ares’ global real estate group. Since launching in January of 2022, the Ares European Real Estate Debt platform has originated and closed on over $1.2 bn of real estate loans across Europe.
Phil Moore, partner and head of European real estate debt - and one of the leading professionals spotlighted in PropertyEU's recent Movers & Shakers feature, said: 'The global opportunity for flexible private real estate lenders continues to grow as we see ongoing retrenchment of traditional sources of capital. Our most recent investments reflect our ability to step into complex situations and provide flexibility up and down the risk/return spectrum at scale.'
Talal Al Dhiyebi, group CEO at Aldar Properties, said: 'Private credit is an increasingly important element of real estate finance in mature markets. With the rising prevalence of non-bank lending, as credit conditions tighten and stricter capital requirements are implemented, we see a substantial opportunity for Aldar as a strategic real estate investor. This partnership between Mubadala, Ares, and Aldar is wholly unique, blending financial strength, a proven track record and in-depth knowledge of the real estate sector and asset classes. It is an ideal opportunity in terms of timing to gain both high quality exposure to a key asset class and a solid foothold in a market that is not only scalable but that also offers favourable risk-adjusted returns through market cycles.'
Omar Eraiqaat, deputy CEO of disruptive investments at Mubadala, added: 'Mubadala has strong and strategic relationships with both Ares and Aldar, and this new platform leverages the collective strengths of each party to invest in the private real estate credit market in the United Kingdom and Europe. This collaborative approach reflects our shared commitment to identifying and capitalizing on unique investment opportunities that deliver sustainable, long-term returns.'
