Aldar Investment Properties LLC announced today that it has agreed to acquire full ownership of Etihad Plaza and Etihad Airways Centre in an AED 1.2 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 and Etihad. The transaction is expected to complete in the second quarter of 2019.
On completion, AED 1.2 billion of investment properties and other assets will be acquired by Aldar Investments in exchange for the transfer of full ownership of Etihad HQ to Etihad.
"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, a 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,” said Jassem Busaibe, Chief Executive Officer of Aldar Investments and Chief Investment Officer of Aldar Properties.
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 recognize annualized annual net operating income of AED 0.1 billion, previously reported as a share of profits from the JV.
New leader at the helm
Aldar Investments will also continue to benefit from a strong tenant base with long leases that provide solid visibility of income. 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.
Aldar Investments is also pleased to appoint Jassem Saleh Busaibe as its Chief Executive Officer. In this role, Mr. Busaibe will oversee the implementation of Aldar Investments’ strategy through the active management and growth of its high-quality portfolio.
A growth story
This deal builds on a transformational 2018 for Aldar, when the Group completed three strategic corporate actions. In March 2018 Aldar entered into a strategic partnership with Emaar; then in May last year, Aldar acquired AED 3.7 billion of high-quality assets. This was followed in September by the creation of Aldar Investments, the region’s largest diversified real estate investment company.
On 13th February, Aldar released its full-year 2018 financial results, reporting a 2 percent increase in revenue to AED 6.3 billion, and a 3 percent increase in net operating income from its recurring revenue assets. Aldar’s net profit was AED 1.9 billion, with gross profit of AED 2.6 billion and development sales of AED 2.6 billion. As a result of these solid results, the Board recommended a 14 fils per share dividend for 2018, representing a 17 percent increase over 2017 and the sixth consecutive year of growth.