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Apollo takes minority stake in Aldar Properties real estate platform

Apollo and Aldar said the deal was part of a previously announced $1.4 billion investment by Apollo into Aldar in February

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Apollo Global Management, a manager of alternative assets, has acquired a minority stake in a subsidiary of Abu Dhabi developer Aldar Properties, the companies said, part of a larger deal announced in February.

Apollo, through its managed investment vehicles, has taken an 11.1 per cent stake in Aldar Investment Properties (AIP), the developer’s real estate investment platform, in a transaction valued at $400 million, they said in a joint statement on Wednesday.

Apollo and Aldar said the deal was part of a previously announced $1.4 billion investment by Apollo into Aldar in February.

“By providing significant financial backing, the transaction is a catalyst for AIP to significantly scale up its real estate platform through further transformative acquisitions,” the statement said on Wednesday.

AIP in July revealed it had acquired four prime commercial towers in Abu Dhabi Global Market, Abu Dhabi’s financial centre, for Dh4.3 billion ($1.2 billion).

Talal Al Dhiyebi, Group CEO at Aldar Properties, said 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.

“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,” he said.

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 $500 million in subordinated perpetual notes to Apollo priced at a coupon of 5.625 per cent.

Aldar has deployed and committed over Dh11 billion ($3 billion) of capital this year as part of its strategy for transformational growth, including over Dh7 billion ($1.9 billion) in recurring income assets.

The transaction involved the issuance of $400 million of common equity and mandatory convertible preferred equity at 100 per cent of NAV into AIP, which houses Aldar’s core asset management business comprising over Dh23 billion ($ 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 per cent as of June 30, 2022.

— With inputs from Reuters