Mubadala sells Dh3.5bn stake in UAE's Aldar Properties to Alpha Dhabi Holding unit

Abu Dhabi-based investment company bought 960 million shares, or a 12.21% stake, through a block trade

Aldar's headquarters in Abu Dhabi. Alpha Dhabi Holding acquired a 12.21 per cent stake in Aldar Properties. Victor Besa / The National

Alpha Dhabi Holding bought a 12.21 per cent stake in Aldar Properties from Mubadala Investment Company for Dh3.5 billion ($953 million).

The company made the acquisition through its subsidiary, Sublime Commercial Investment, Mubadala said on Wednesday.

Alpha Dhabi Holding is an Abu Dhabi investment company with a diversified portfolio of listed and unlisted equities in local and regional markets.

Mubadala will retain a 25 per cent stake to remain Aldar’s largest shareholder and a long-term, strategic investor.

It said it supports Aldar’s growth as a "national real estate champion" with the highest market value in the property sector, in addition to its role as a key driver of the emirate's economic diversification.

The transaction, which involved the transfer of 960 million shares in a block trade, “is one of the largest private share purchases in a UAE-listed company and was carried out by International Securities and ADCB Securities”, Mubadala said.

Aldar's shares were purchased at Dh3.67 per share, which was the price they closed at last Thursday.

The share price has more than doubled over the past 12 months and is up 19 per cent since the year began.

Aldar Properties, the UAE’s biggest listed developer, currently has a market capitalisation of Dh29.2bn.

Its fourth-quarter net profit rose by 28 per cent to Dh729m while revenue grew by 19 per cent to Dh2.53bn. However, full-year profit fell by 2 per cent to Dh1.93bn as direct costs, provisions, impairments and write-downs increased.

“Institutional investor interest in Aldar reflects confidence in the Abu Dhabi real estate sector and Aldar’s central role in implementing the emirate’s economic diversification strategy,” said Mubadala.

Aldar also revamped its business model earlier this year and now has a group operating structure managing its core development and investment businesses.

Aldar Development is responsible for building out the company’s 7,500-hectare land bank and oversees Aldar Projects, Aldar Ventures and Aldar Egypt subsidiaries.

Aldar Investment is responsible for managing its Dh16bn portfolio of recurring income assets, including its retail, residential and commercial assets under a subsidiary known as Aldar Estates. It also manages the company’s education and hospitality businesses.

The Abu Dhabi developer has completed a number of transactions, including an agreement with state-owned ADQ to manage projects worth more than Dh30bn in the capital.

It also sold the Abu Dhabi Golf Club Complex and the Westin Hotel to an unnamed buyer for Dh180m, as well as two district cooling units to Tabreed for a total value of Dh963m.

The company also aims to expand in Egypt, the Arab world's most populous country and is looking to buy a stake in Sixth of October for Development and Investment Company, it said earlier this month.

Mubadala, which manages more than $232bn in assets, invests on behalf of the Abu Dhabi government across a range of sectors. Its international investments include stakes in Softbank’s Vision Fund, Reliance Retail Ventures, Austria’s oil and gas entity OMV and petrochemicals companies Borealis and Nova Chemicals.

The company signed a new deal to buy a stake in German ophthalmic lens manufacturer Rodenstock Group, further expanding its life sciences and health care investment portfolio.

It also plans to invest £800m ($1.1bn) in the UK's life sciences sector over the next five years.

Mubadala bought a refinery and logistics assets from Brazil's state oil company Petrobras for $1.65 billion this month, continuing to invest in traditional sectors such as energy.