Masdar's Green Reit acquires sustainable property worth $254m

The deal takes the fund's portfolio value to $520m, with further assets identified for potential future investments

Masdar's Green Real Estate Investment Trust has bolstered its property portfolio. Photo: Masdar

Masdar City's Green Real Estate Investment Trust (Green Reit) has completed the acquisition of property worth Dh934 million ($254 million) as the fund seeks sustainable and commercially viable investments in real estate.

The deal takes the fund's portfolio value to Dh1.91 billion ($520 million), with further assets identified for potential future investments, it said on Monday.

Investing in sustainable urban development is a compelling commercial proposition that is also environmentally responsible, said Anthony Taylor, senior executive officer of Masdar Capital Management Limited.

“Climate-resilient development is essential if we are to reach net zero," he said.

"The fact that the Reit has more than doubled in assets in the two years since incorporation underlines the potential for sustainable real estate development in the region."

Abu Dhabi-based Masdar City fund is the UAE’s first sustainable Reit. The UAE is at the forefront of major sustainability initiatives.

Last year, the country committed to achieve net zero emissions by 2050, becoming the first state in the Mena region to do so.

The Emirates plans to invest Dh600 billion in clean and renewable energy sources to realise this goal.

The Masdar Green Reit has been set up at Abu Dhabi Global Market as a qualified investor fund, offering professional investors the opportunity to invest in a portfolio of income-producing, sustainable real estate assets.

The fund’s latest acquisitions include two fully occupied buildings within Masdar City — the head office of the Abu Dhabi Quality and Conformity Council and Etihad Airways’ Eco Residences complex — both with a Leadership in Energy and Environmental Design (Leed) platinum rating.

The third property acquired, the Technology Innovation Institute headquarters, has a Leed gold certification.

All three assets have achieved a Three Pearl rating under the Abu Dhabi Estidama Pearl Building Rating System, according to the fund.

Masdar's Green Reit will focus on professional investors seeking cornerstone equity participation as it grows its portfolio with additional pre-identified sustainable assets within Masdar City and in the UAE in coming years, it said.

The latest acquisition, announced at Abu Dhabi Finance Week last week, comes after a $200 million green loan extended to Masdar City's Reit by First Abu Dhabi Bank in January to boost the renewable energy company's portfolio by supporting further acquisitions.

Following the new acquisitions and the green loan drawdown, Masdar's Green Reit provides future investors with access to a diversified portfolio that has a high occupancy of 98 per cent and an average unexpired lease term of more than six years, it said.

Masdar's Green Reit was unveiled in December 2020 with an initial portfolio of four commercial properties in Masdar City.

The fund offers Masdar the opportunity to raise third-party capital from its real estate portfolio while ensuring the sustainability of the property assets within Masdar City.