Aldar Investment, the region’s leading real estate investment platform with more than AED 22 billion of assets under management, has completed the acquisition of a 70% equity interest in Abu Dhabi Business Hub, valuing the company at more than AED 500 million, with the remaining 30% owned by a strategic partner.
The acquisition marks the creation of Aldar Logistics, the company’s new logistics real estate vertical, which will focus primarily on the United Arab Emirates, with the potential to expand into Saudi Arabia and Egypt. Following the completion of the Abu Dhabi Business Hub transaction, Aldar Investment intends to assess further acquisition opportunities through the newly set up logistics vertical as it seeks to increase its allocation across the sector.
Abu Dhabi Business Hub is a leading developer and manager of real estate in Abu Dhabi, and owns a strategically located warehousing, industrial, and office complex in Industrial City Abu Dhabi which has a total net lettable area of c. 166,000 sqm. It comprises 3 office buildings, 132,000 sqm of warehouses, and undeveloped industrial land plots for future expansion. The existing logistics facilities are over 90% occupied, with long-term leases with anchor tenants including supermarket and online grocery company Spinneys, industrial zone operator ZonesCorp, and Abu Dhabi’s media free zone operator, Twofour54. The office block together with the undeveloped land plots bring significant potential for further growth.
Jassem Busaibe, Chief Executive Officer at Aldar Investment, said: “We see strong potential for expansion in warehousing and logistics real estate in the region, a segment which has robust fundamentals driven by infrastructure development and growth of the digital economy. The addition of logistics assets is immediately yield-accretive to our diversified real estate portfolio and further enhances its risk profile. As a major institutional investor, we are also uniquely placed to drive income growth by deploying an active approach to asset management. This includes investing in digital technology and automation, to ensure that the assets that we acquire serve the evolving needs of tenants and remain future proof.”
Growth of the UAE’s logistics sector is driven by substantial investment into transportation and infrastructure, accelerated through the ‘Projects of the 50’ series of developmental and economic initiatives to ensure the country becomes a comprehensive hub in all sectors. The projects include AED 50 billion of investment in a railway network for transporting goods and passengers across the UAE, which builds on the first phase of Etihad Rail. Abu Dhabi is also investing significantly in ports and integrated industrial zones, including the Khalifa Industrial Zone Abu Dhabi (KIZAD) and The Industrial City of Abu Dhabi (ICAD).
Aldar Investment is also responsible for Aldar Investment Properties (AIP), the region’s largest institutional-class real estate platform, which will now welcome logistics real estate as an asset class. AIP is rated Baa1 by Moody’s, the highest credit rating for a corporate non-government corporate in the region.