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.
According to a $400 million deal, Apollo, through its managed investment vehicles, has acquired an 11.1 percent ownership in Aldar Investment Properties (AIP), the developer’s real estate investment platform.
According to Apollo and Aldar, the deal was a component of Apollo’s previously disclosed $1.4 billion investment in 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 disclosed in July that it had paid Dh4.3 billion ($1.2 billion) for four prestigious commercial towers in Abu Dhabi Global Market, the emirate’s financial center.
According to Talal Al Dhiyebi, Group CEO at Aldar Properties, Apollo is a highly regarded international investor. This commitment shows Apollo’s strong belief in Aldar’s transformational growth agenda. It enhances the country’s and Abu Dhabi’s reputation, which is seeing an increase in 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.
According to Scott Kleinman, co-president of Apollo, this deal gives Apollo access to the best institutional real estate in the UAE through a reputable 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.”
Following the issuance by AIP of $500 million in subordinated perpetual notes to Apollo priced at a coupon of 5.625 percent in March 2022, the equity transaction is now complete.
As part of its goal for transformational growth, Aldar has committed and deployed more than Dh11 billion ($3 billion) of capital this year, including more than Dh7 billion ($1.9 billion) in assets with recurring income.
AIP, which houses Aldar’s core asset management business and more than Dh23 billion ($6.3 billion) in prime real estate assets across the retail, residential, commercial, and logistics segments, received $400 million in common equity and mandatory convertible preferred equity as part of the transaction. With occupancy at 92 percent as of June 30, 2022, the diversified portfolio has demonstrated excellent resilience across economic downturns.