Aldar Investments Properties, a unit of Abu Dhabi’s biggest listed developer Aldar Properties, is acquiring full ownership of Etihad Plaza and Etihad Airways Centre from Etihad Airways in a transaction worth Dh1.2 billion in its first major deal since launching in 2018.
The acquisition is expected to be completed in the second quarter of 2019, Aldar Investments, a fully owned subsidiary of Abu Dhabi's biggest listed developer Aldar Properties, said in a statement on Wednesday. The company also said it appointed Jassem Busaibe as the chief executive of its investments unit.
The two properties, along with Etihad Airways' headquarters, were previously owned by Aldar Properties and Etihad in a 50-50 joint venture. As part of the deal, Etihad will gain full ownership of its headquarters. 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 to 40 per cent loan to value, it said.
"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, free cash flow that can support future dividend growth," Mr Busaibe said.
Aldar Investments was launched in September and became the region's largest diversified real estate investment company, according to its website. The portfolio includes Dh20bn ($5.4bn) of revenue-generating assets. About 5,000 residential units and 500,000 square metres of retail and commercial space were transferred into the new vehicle, along with Dh6bn of existing debt.
The deal with Etihad Airways adds 789 residential units, 17,940 square metres of total area of office space for rent as well as 11,000 square metres in leasable retail space to Aldar Investments' portfolio.
The transaction will add Dh100 million in annual net operating income to Aldar Investments, previously reported as a share of profits from the JV, the company said.
Aldar Investments will "continue to benefit from a strong tenant base with long leases that provide solid visibility of income", it said.
Etihad Plaza is a mid-rise residential development housing Etihad employees in apartments ranging from one to four bedrooms, and is fully leased to Etihad on a long-term lease expiring in 2034, according to the statement.
The plaza features retail units comprising offices and medical facilities for Etihad as well as retail and food and beverage units that are leased out to third parties.
Last year, Aldar Properties reached an agreement with Tourism Development & Investment Company to acquire real estate assets worth Dh3.7bn, in one of the largest real estate acquisitions in the country’s history.
Aldar Properties posted a 2 per cent revenue rise for full-year 2018, attributed to higher returns from revenue raising assets and new acquisitions.
