A unit of Aldar Properties has acquired FAB Properties, which provides property management services, as Abu Dhabi’s biggest listed developer continues to expand its portfolio in the country.
Under the deal, Aldar Estates will integrate a property management portfolio of 22,000 residential units across 600 properties into its expanding platform in the UAE, Aldar said in a statement on Monday to the Abu Dhabi Securities Exchange, where its shares are traded.
“The acquisition of FAB Properties adds further scale to our business through a diverse portfolio of properties under management and access to a broader client base across the UAE, with room for further growth,” said Talal Al Dhiyebi, group chief executive of Aldar and chairman of Aldar Estates.
Pending regulatory approvals, the acquisition is expected to bolster Aldar Estates' recurring income due to strong occupancy across the FAB Properties portfolio and its “robust” 2022 financial performance, Aldar said.
Aldar Estates will also benefit from a “stable” growth pipeline as the exclusive property management partner for properties financed by FAB, the company added.
FAB Properties, a unit of the UAE's biggest lender First Abu Dhabi Bank, was set up in 2011.
It specialises in end-to-end real-estate solutions, ranging from marketing, leasing, facility management and financial reporting.
The sale is in line with FAB Group's plan to "leverage strategic partnerships to create value and to enhance specialised service offerings", the lender said in a separate statement to the ADX on Monday.
The transaction is not expected to have a material impact on the group's financial performance for the full year of 2023, it said.
“Through this transaction and future collaborations with Aldar Estates, FAB will further enhance the property services offering available to our clients, while creating new opportunities to support their growth,” said Hana Al Rostamani, group chief executive of FAB.
Aldar is at the heart of Abu Dhabi’s efforts to develop its property sector. The developer continues to expand its portfolio, announcing a number of new deals this year.
In July, Eltizam Asset Management Group, a property and facilities management services company that is jointly owned by IHC and Adnec Group, was merged with Aldar Estates.
The latest deal will boost Aldar Estates' portfolio of residential units under management to 157,000.
That includes prime retail and commercial spaces with a gross leasable area of more than one million square metres, and facilities management contracts valued at about Dh2.5 billion ($681 million).
The UAE property market has bounced back strongly from the coronavirus pandemic thanks to government initiatives, higher oil prices and other measures to support the economy.
Abu Dhabi recorded 10,557 real estate transactions worth Dh46.33 billion in the first half of 2023 amid strong demand from buyers, according to official data.
The value of the deals more than doubled during the six-month period, while the volume of transactions, which include property sales and mortgages, rose by 41 per cent on an annual basis, the Abu Dhabi media office reported, citing data from the Department of Municipalities and Transport.
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FFP EXPLAINED
What is Financial Fair Play?
Introduced in 2011 by Uefa, European football’s governing body, it demands that clubs live within their means. Chiefly, spend within their income and not make substantial losses.
What the rules dictate?
The second phase of its implementation limits losses to €30 million (Dh136m) over three seasons. Extra expenditure is permitted for investment in sustainable areas (youth academies, stadium development, etc). Money provided by owners is not viewed as income. Revenue from “related parties” to those owners is assessed by Uefa's “financial control body” to be sure it is a fair value, or in line with market prices.
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Killing of Qassem Suleimani
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
The biog
Alwyn Stephen says much of his success is a result of taking an educated chance on business decisions.
His advice to anyone starting out in business is to have no fear as life is about taking on challenges.
“If you have the ambition and dream of something, follow that dream, be positive, determined and set goals.
"Nothing and no-one can stop you from succeeding with the right work application, and a little bit of luck along the way.”
Mr Stephen sells his luxury fragrances at selected perfumeries around the UAE, including the House of Niche Boutique in Al Seef.
He relaxes by spending time with his family at home, and enjoying his wife’s India cooking.
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Yahya Al Ghassani's bio
Date of birth: April 18, 1998
Playing position: Winger
Clubs: 2015-2017 – Al Ahli Dubai; March-June 2018 – Paris FC; August – Al Wahda
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Match info:
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