Aldar Investment Properties has announced its acquiring full ownership of Etihad Plaza and Etihad Airways Centre in an AED1.2 billion transaction with Etihad Airways.
As part of the deal, Etihad will take 100 percent ownership of Etihad Airways HQ. The three properties were previously held in three 50/50 joint ventures between Aldar Properties and Etihad (the JV). The transaction is expected to complete in Q2 2019.
This is the first major transaction for Aldar Investments which launched in September 2018. Aldar Investments is a wholly-owned subsidiary of Aldar and, upon its creation, became the region’s largest diversified real estate investment company.
On completion, AED1.2 billion of investment properties and other assets will be acquired by Aldar Investments in exchange for transfer of full ownership of Etihad HQ to Etihad. As part of the transaction, Aldar will assume existing debt within the Etihad Plaza and Etihad Airways Centre JVs, which will be kept in line with Aldar Investment’s established debt policy to hold 35-40 percent loan to value.
The deal adds 789 residential units, 17,940 sqm Net Leasable Area, NLA, of office space and 11,000 sqm NLA of retail space to Aldar Investments’ existing high-quality portfolio. Full ownership of these assets will enable Aldar Investments to recognise annualised annual net operating income of AED0.1 billion, previously reported as a share of profits from the JV. Aldar Investments will also continue to benefit from a strong tenant base with long leases that provide solid visibility of income.
Jassem Busaibe, CEO of Aldar Investments and Chief Investment Officer of Aldar Properties, commented, "In September, we announced the creation of Aldar Investments to accelerate growth opportunities and unlock value through active management of a diverse portfolio of real estate assets."
"The acquisition of Etihad Plaza and Etihad Airways Centre allows us to drive value as we take these assets into our larger real estate platform, enabling greater capital efficiency, grow our net operating income and ultimately, free cash flow that can support future dividend growth. The deal continues Aldar’s remarkable start to 2019 and further demonstrates the strength of Abu Dhabi’s real estate market," he added.
Aldar Investments also announced that it will appoint Jassem Saleh Busaibe as its Chief Executive Officer. In this role, Busaibe will oversee the implementation of Aldar Investments’ strategy through the active management and growth of its high-quality portfolio.