Aldar Properties and Apollo Global Management, one of the world’s largest alternative investment managers, have signed a commitment that will see Apollo-managed funds and clients invest a total of $1.4 billion to drive the Abu Dhabi-based developer’s growth.
The commitments include a $500 million investment into a land joint venture, $500 million perpetual subordinated notes issued by Aldar Investment Properties, $300 million mandatory convertible preferred equity investment and a $100 million common equity investment.
A statement said the $500 million land joint venture will allow Aldar to realise long-term value tied up in its vast landbank.
As part of the deal, Apollo will take a direct minority stake in Aldar Investment Properties at its net asset value.
Aldar Investment Properties is rated Baa1 by Moody’s, the highest credit rating for a non-government corporate in the region.
This deal represents Aldar’s first-ever issuance of perpetual subordinated notes and the largest hybrid private placement in the MENA region with the longest non-call period.
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.”
The long-term deal, which will see Apollo and Aldar look at further opportunities in the future, will enable Aldar to accelerate and press forward with its transformational growth agenda, he added.
As a result of the transaction, which is expected to close by the end of March, Aldar will receive significant cash proceeds that are earmarked to drive its transformational growth agenda.
Apollo CEO Marc Rowan 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 UAE. 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.”
The Aldar investment marks Apollo’s latest commitment to Abu Dhabi and the UAE. It follows a 2020 strategic partnership with Mubadala Investment Company, as well as a long-term joint venture with ADNOC in which Apollo funds and clients led a $2.7 billion investment in a real estate JV.
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