Aldar Properties, the biggest developer in Abu Dhabi by market value, has set up a logistics business line after acquiring a 70 per cent stake in Abu Dhabi Business Hub, which owns a warehousing, industrial and office complex in the emirate.
The acquisition was completed by its subsidiary Aldar Investment and values Abu Dhabi Business Hub at more than Dh500 million ($136m), Aldar said in a statement on Tuesday to the Abu Dhabi Securities Exchange, where its shares are traded. It did not disclose the total value of the deal.
Aldar Logistics, the company’s new unit, will focus primarily on the UAE, with the potential to expand into Saudi Arabia and Egypt.
“We see strong potential for expansion in warehousing and logistics real estate in the region, a segment which has robust fundamentals driven by infrastructure development and growth of the digital economy,” said Jassem Busaibe, chief executive of Aldar Investment.
“The addition of logistics assets is immediately yield-accretive to our diversified real estate portfolio and further enhances its risk profile.”
The new transaction comes as demand for warehousing units continues to increase due to the e-commerce boom that was fuelled by the pandemic.
The UAE's e-commerce market is forecast to increase by 60 per cent from 2021 to more than $8 billion in 2025, according to a report by EZDubai, an e-commerce zone in Dubai South, and Euromonitor International.
The country is also ranked among the top three logistics centres in emerging markets, after China and India, in the latest Agility Emerging Markets Logistics Index, that rates countries for overall competitiveness based on their logistics strengths, business climates and digital readiness.
The UAE, the Arab world’s second-largest economy, is investing heavily in developing infrastructure and building the transport network to drive the growth of the logistics sector.
New projects include Dh50bn of investment in a railway network for transporting goods and passengers across the UAE, which builds on the first phase of Etihad Rail. Abu Dhabi is also investing significantly in ports and integrated industrial zones, including Kizad and the Industrial City of Abu Dhabi (Icad).
Abu Dhabi Business Hub's complex in Icad has a total net lettable area of 166,000 square metres and comprises three office buildings, 132,000 square metres of warehouses and undeveloped industrial land plots for future expansion.
The existing logistics units owned by Abu Dhabi Business Hub are over 90 per cent occupied, with long-term anchor tenants including supermarket and online grocery company Spinneys, industrial zone operator ZonesCorp and Abu Dhabi’s media free zone operator, Twofour54, according to Aldar.
“Following the completion of the Abu Dhabi Business Hub transaction, Aldar Investment intends to assess further acquisition opportunities through the newly set up logistics vertical as it seeks to increase its allocation across the sector,” the developer said.
Aldar is continuing to boost its portfolio through new acquisitions. It bought two properties in Ras Al Khaimah this year — Rixos Bab Al Bahr hotel for Dh770m and Al Hamra Mall for $111.6m.
The Abu Dhabi-based company is also increasing investments outside the country. Last year, a consortium of Aldar and one of the region’s biggest holding companies, ADQ, acquired a majority stake in Egypt’s Sixth of October for Development and Investment Company for 6.1bn Egyptian pounds ($386.8m).
Aldar adopted a new group operating model and organised its business into two segments. Aldar Investment is responsible for managing its Dh22bn portfolio of recurring income assets, including its hospitality portfolio, while Aldar Development is responsible for building the company's 75 million-square metre land bank.