Abu Dhabi-based real estate developer, Aldar Properties and Apollo Global Management, one of the world’s largest alternative investment managers, have signed a landmark agreement in which Apollo-managed funds and clients invest a total of $1.4 billion in strategic capital to drive Aldar’s transformational growth initiatives.
The $1.4 billion is structured as a $500 million investment into a land joint venture, another $500 million as perpetual Subordinated Notes issued by Aldar, a $300 million as Mandatory Convertible Preferred Equity investment in Aldar and $100 million as Common Equity investment in Aldar.
As part of the deal, Apollo will take a direct minority stake in Aldar at its Net Asset Value, confirming Apollo’s conviction in the company’s growth plan, management competencies, and potential to capitalize on accretive opportunities that may arise in the future.
This investment demonstrates Aldar’s ability to attract institutional capital into its real estate platforms. It also showcases Aldar and Apollo’s efforts to execute innovative, diverse capital solutions as evidenced by 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.
“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.”
As a result of the transaction, which is expected to close by the end of Q1 2022, Aldar will receive significant cash proceeds that are earmarked to drive its transformational growth agenda as it looks to accelerate the effective deployment of capital across its robust pipeline of development and value investment opportunities.
Apollo Chief Executive Officer Mr. Marc Rowan said that “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 United Arab Emirates. 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.”