Adia sees 'very attractive return' in private real estate credit

Fund is bullish about senior housing as it expands its presence in the US and UK

The Abu Dhabi Investment Authority has expanded its private credit exposure across the US, Europe, India, Australia and South Korea. Mona Al-Marzooqi / The National

The Abu Dhabi Investment Authority (Adia), one of the world’s largest sovereign wealth funds, is bullish on the real estate sector's private credit space and senior housing assets, a senior executive said.

“We invest in both equity and in debt and I would say that private credit in the real estate space is still an attractive place,” Alexander Goldman, global head of real estate at Adia, told a panel at Abu Dhabi Finance Week on Tuesday. “We're still seeing returns in the low teens, which, on a risk-adjusted basis, is a very attractive return.”

Adia, which does not disclose its assets, invests on behalf of the Abu Dhabi government. It is the largest sovereign wealth fund in the Gulf, with assets of about $1.1 trillion, consultancy Global SWF said.

Adia makes direct and indirect investments across asset classes such as equities, fixed income, infrastructure, private equity and property.

In its 2024 annual report, the fund said it expanded its private credit exposure in real estate across the US, Europe, India, Australia and South Korea. Tight monetary policies prompted traditional institutions to restrict their lending criteria, allowing private credit providers to fill the void.

The fund is also bullish on senior housing senior assets. "On the senior housing side, when you look at the demographics again and you look at what's gone on over the last five years, and you look at the opportunity, I think it's very attractive," Mr Goldman said.

He added that the outlook in five years is uncertain, but noted that with their typical four to six year holding period before rotating assets, the current environment is particularly attractive.

Adia has increased its presence in the UK and US in mainstream residential, student housing and senior living assets since last year as housing shortages drove demand, its annual report showed.

Speaking on the same panel, Bill O'Regan, group chief executive of Modon Holding, said the company would continue to expand globally next year and "is very bullish" on the Abu Dhabi property market.

Modon this year announced a partnership with Broadgate Reit, owned equally by FTSE 100-listed property developer British Land and global investor GIC, marking its entry in London's prime real estate market.

The transaction created a 50:50 joint venture to build 2 Finsbury Avenue, a 750,000-square-foot mixed-use tower on Broadgate’s office-led campus in central London.

The company is also integrating AI across its operations through 27 initiatives. "For things like tendering, major construction packages, we've reduced the average review time for tender submissions from six weeks to four days," Mr O'Regan said.