Middle East real estate giant Aldar Properties creates a billion-dollar investment firm

  • United Arab Emirates (UAE) real estate developer Aldar Properties is spinning off its investment division to create Aldar Investments, a subsidiary with around $5.4 billion worth of iconic real estate assets.
  • "It's another extremely exciting day in the Aldar story, we're launching Aldar Investments, the region's largest and most diversified investment company," Aldar Properties Chief Executive Talal Al Dhiyebi said.

United Arab Emirates (UAE) real estate developer Aldar Properties is spinning off its investment division to create a subsidiary with around $5.4 billion worth of iconic property assets.

"It's another extremely exciting day in the Aldar story, we're launching Aldar Investments, the region's largest and most diversified investment company," Aldar Properties Chief Executive Talal Al Dhiyebi told CNBC's Hadley Gamble.

"A lot of people still look at Aldar as a development company but today we're much more balanced, 50 percent of our income comes from the development business — that's the typical homebuilder and 'build to sell' developer — and then on the asset management side we have quite a diverse portfolio of assets," he said.

Walter Bibikow | Photolibrary | Getty Images
UAE, Abu Dhabi, Yas Island, Yas Mall, interior, opened in 2015

He said the firm were "spinning off" the investment company with 20 billion United Arab Emirates (UAE) dirhams ($5.4 billion) worth of assets in residential, commercial, retail and hospitality. This includes some "trophy assets" such as Yas Mall, The Gate Towers and Arc.

Explaining the rationale for the move, Al Dhiyebi said the company thought it "was the right time to optimize our capital structure and unlock capital." He added that Aldar Investments had been assigned a "Baa1" rating by Moody's ratings, the region's highest non-government corporate credit rating, which means that Aldar Investments can raise capital, independently of Aldar.

Al Dhiyebi said Aldar Investments would consider an initial public offering (IPO) — becoming a publicly-listed company on a stock exchange — at some point in the future. "We are ready to monetize this business at the right time if it's going to deliver more shareholder growth."

Founded in 2004 and headquartered in Abu Dhabi, one of seven emirates that make up the UAE, Aldar is responsible for many residential, commercial and cultural developments in the region. Prominent developments include its headquarters in the Al Raha Beach development, the Gate Towers in Shams Abu Dhabi on Al Reem Island, and Yas Island's F1 racing circuit.

Responding to doubts over whether investors could be deterred from investing in the UAE, given geopolitical turbulence in the wider region, Al Dhiyebi said the UAE remained a safe haven.

"The geopolitical situation is something that is not new to this region, it has existed over decades and the UAE has always proven to be resilient over that period, and always has been the number one safe haven for investors."

The chairman of Aldar Properties Mohamed Khalifa Al Mubarak said in a statement that the launch of Aldar Investments allowed investors access to the UAE's economy.

"As the owner of $5.4 billion of prime real estate assets, Aldar Investments provides an opportunity for investors to benefit from Abu Dhabi's AA-rated economy — the strongest in the MENA region and from the government's commitment to growth and investment through the Abu Dhabi 2030 Plan."

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