Abu Dhabi pension fund, ADNOC unite in $900mn worth real estate deal

By Shilpa Annie Joseph, Trainee Reporter
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ADPF
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UAE’s leading oil firm Abu Dhabi National Oil Company (ADNOC) has signed a strategic real estate investment alliance with Abu Dhabi Pension Fund (ADPF), marking the largest single transaction between the two entities to date and the fund’s third transaction with Abu Dhabi’s energy giant.

Under the terms of the deal, ADPF will acquire a 31 percent holdings in Abu Dhabi Energy Real Estate Company (ADEREC) for $900 million. ADEREC was formed to hold ADNOC’s 51 percent stake in Abu Dhabi Property Leasing Holding Company (ADPLHC).

The ADPF partnership follows the announcement by ADNOC that it has entered into a long-term strategic investment for an underlying real estate portfolio valued at $5.5 billion with Apollo Global Management and its subsidiaries (collectively Apollo), one of the world’s largest alternative investment managers, and a group of institutional investors.

After the completion of the deal, ADNOC will hold 69 percent, and ADPF will have 31 percent of ADEREC, while Apollo and its subsidiaries will continue to directly hold 49 percent of ADPLHC.

ADNOC said in a statement that it will retain full ownership and control over the properties of selected real estate and social infrastructure, as well as transparency for all operations and maintenance.

Dr. Sultan Al Jaber
Dr. Sultan Al Jaber
Group CEO – ADNOC
UAE Minister of Industry & Advanced Technology

“We are delighted to once again partner with the Abu Dhabi Pension Fund, the custodian and long-term investor of the UAE’s citizens’ savings. This innovative partnership reinforces ADNOC’s ability to unlock and drive incremental value from our unique energy infrastructure and real estate asset base while simultaneously creating attractive opportunities for the long-term financial well-being of the United Arab Emirates. The creation of our real estate investment partnership with Apollo last year enabled ADNOC to monetize its non-oil and gas strategic infrastructure assets and reinvest the proceeds into our core business to deliver further growth. The partnership structure continues to ensure that ADNOC maintains full ownership and control over our real estate assets, while further strengthening our balance sheet and allowing for greater capital flexibility.”

This new investment is another opportunity for ADPF to access high-quality lease assets with superior, risk-adjusted returns and revenue profiles and to lock in long-term, recurring, and stable cash flows. The portfolio of assets is expected to achieve strong future occupancy and rental rates.

H.E. Jassim Mohammed Buatabh Al Zaabi, Chairman of the Board of Directors of the Abu Dhabi Pension Fund, stated that this agreement is another example of active cooperation with ADNOC and is a continuation of the Fund’s efforts to develop broad and diversified local and international investment partnerships.

“We are pleased to expand our partnership with ADNOC, one of the most important national companies that contribute to boosting the economic growth in the Emirate of Abu Dhabi. This agreement aligns with the Fund’s investment strategy, aimed at investing in high-quality diversified portfolios to achieve the maximum possible value,” commented Mr. Al Zaabi.

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