Aldar to invest $1.36bn to develop income-generating assets in Abu Dhabi

Aldar Properties, Abu Dhabi’s biggest listed developer, will invest Dh5 billion ($1.36 billion) to develop a range of income-generating assets in Abu Dhabi, with a focus on commercial, retail and hospitality sectors amid growing demand for property in the UAE.

The new assets will be delivered in a phased manner between 2025 and 2027 and will add to a growing recurring income portfolio of the company that also includes logistics assets, Aldar said in a statement on Tuesday to the Abu Dhabi Securities Exchange, where its shares are traded.

“Aldar is driving rapid expansion of its high-value asset portfolio through a disciplined acquisition and develop-and-hold approach, to significantly increase recurring-income streams and long-term capital appreciation,” Talal Al Dhiyebi, group chief executive of Aldar Properties, said.

As part of the investment strategy, Aldar will develop commercial assets in Yas Island, Saadiyat Island, and Al Maryah Island. This includes a 12-storey office tower next to the Yas Plaza Hotels on Yas Island, with 25,000 square metres of new leasable area with retail space. It is expected to be handed over in 2025.

On Saadiyat Island, the company said, it will develop a business park with about 26,000 square metres of NLA at Saadiyat Grove, an integrated mixed-use development in Abu Dhabi’s Cultural District. Set for completion in 2027, the project will have four Grade A commercial office buildings, the company said.

In Abu Dhabi’s financial district on Al Maryah Island, Aldar will extend its partnership with Mubadala and will add a second Grade A commercial tower to the site of the 37-storey office building announced in 2023, to expand the availability of office space within The Abu Dhabi Global Market once completed in 2027.

The expansion within the financial district follows Aldar’s acquisition of the four ADGM towers and Al Maryah Tower in 2022 in deals valued at $1.17 billion and $122.5 million, respectively.

The commercial developments on Saadiyat Island, Yas Island and Al Maryah Island will increase Aldar’s commercial NLA by 31 per cent to 549,000 square metres.

Occupancy across the company’s commercial property portfolio currently stands at 95 per cent, with occupancy at the four ADGM towers at 96 per cent at the end of 2023.

The property market in the UAE bounced back strongly from the pandemic-driven slowdown in 2021 and the trend has continued since then as the Arab world's second-largest economy remains on a solid growth trajectory.

In the fourth quarter of 2023, sales prices for offices in Abu Dhabi rose 38.7 per cent annually to Dh14,767 per square metre, according to the latest report from ValuStrat. Asking rents for offices during the period rose 13.3 per cent to Dh831 per square metre.

The property consultancy expects continued demand for office space in the UAE capital this year, driven by government initiatives and the implementation of visa programmes for remote workers and retirees.

Aldar, the developer behind Abu Dhabi's Formula One circuit and other developments in the emirate, is also boosting its retail portfolio.

The company is developing 78,000 square metres of NLA at Saadiyat Grove, including a central shopping destination, two retail boulevards, and community retail spaces. It will also develop retail assets in Saadiyat Lagoons, Noya, and Yas Golf Collection.

In the hospitality segment, the company will develop and manage the 127-room Nobu-branded hotel on Saadiyat Island, which is set to be completed in the second quarter of 2027.

“Once the office and retail assets are completed, they will be part of the Aldar Investment Properties portfolio, which houses the company’s Dh25 billion of income-generating real estate assets,” Aldar said on Tuesday.

In 2022, Apollo Global Management, one of the world’s largest alternative investment managers, acquired a $400 million strategic equity stake in Aldar Investment Properties, a subsidiary of Aldar.