Aldar and Mubadala join forces for $8.2bn Abu Dhabi real estate projects

Aldar Properties and Mubadala Investment Company, a sovereign investor owned by the Government of Abu Dhabi, have extended their long-standing strategic partnership with the establishment of a series of joint ventures to own and manage real estate assets across Abu Dhabi valued at more than AED 30 billion ($8.2 billion).

The partnership, which utilises Mubadala’s land bank and institutional expertise and Aldar’s strength in development and asset management, will be owned 60:40 by Aldar and Mubadala respectively. The four joint ventures are anticipated to create substantial value for Abu Dhabi through a retail platform to consolidate the emirate’s premium shopping destinations, the acquisition of sustainable mature residential and commercial income-generating assets in Masdar City, the development of strategically located islands adjacent to Saadiyat Island and Yas Island, and the creation of a logistics park close to Zayed International Airport.

The parties aim to finalise and complete the transactions within the coming months, subject to final due diligence.

Talal Al Dhiyebi, group chief executive officer of Aldar, said: “This deal represents the continued evolution of our strategic partnership with Mubadala, with the latest collaboration designed to create substantial value for both parties by combining Aldar’s expertise in real estate asset management and development, and Mubadala’s portfolio of high-quality income-generating assets and land bank. We expect these opportunities to deliver attractive returns for our shareholders and to make a notable contribution to Abu Dhabi’s development as a premier international business and lifestyle destination.”

Bakheet Al Katheeri, chief executive officer of the UAE investments platform at Mubadala, said: “Mubadala welcomes the expansion of its longstanding partnership with Aldar through these strategic joint ventures. Capitalising on Aldar's position as the national real estate champion with a proven track record in development and active asset management, along with Mubadala's portfolio of prime land and established income-generating assets, this collaboration, once concluded, is expected to unlock significant value creation opportunities. This strategic partnership aims to optimise asset utilisation, drive long-term returns, and continue to position Abu Dhabi as the global premier business and lifestyle destination."

The agreements will build on Mubadala and Aldar’s longstanding partnership. Following Aldar’s acquisition of the four Abu Dhabi Global Market towers from Mubadala in 2022, a joint venture was created between both parties to acquire Al Maryah Tower and develop further Grade A commercial space across Abu Dhabi’s international financial centre.

Creation of a premium retail platform in Abu Dhabi

Through the partnership, Mubadala and Aldar will create an AED 9 billion ($2.5 billion) retail platform that will own Abu Dhabi’s existing premier retail destinations. Aldar will include its flagship retail destination, Yas Mall, while Mubadala will contribute The Galleria Luxury Collection, a luxury retail experience at Abu Dhabi Global Market, Al Maryah Island.

The new platform is expected to provide substantial synergies for the underlying assets through a coordinated retail strategy that will leverage its scale to attract new luxury brands to Abu Dhabi and provide customers with world class retail experiences.

The transaction provides diversification benefits for both parties and significant revenue upside from active asset management provided by Aldar, which has a track record in retail value creation and will own a majority stake in the platform. The Galleria Luxury Collection is also located within the financial district, providing additional synergies for Aldar, having acquired the four adjacent ADGM towers in 2022. Occupancy at the towers now stands at 95%.

Joint ownership of income generating assets at Masdar City

In addition, Mubadala and Aldar intend to establish a joint venture to own AED 3 billion ($817 million) worth of income-generating real estate assets at Masdar City, Abu Dhabi’s sustainable urban community and free zone hub.

The joint venture, once finalised, will include existing income-generating commercial and residential properties totalling more than 400,000 square metres of net leasable area (NLA) with overall occupancy currently standing at more than 95%. The partners will own the 14 assets within the Masdar City Green REIT, as well as three further assets within the masterplan. In addition, two assets under construction, with a further 50,000 square metres of NLA, are intended to be contributed to the joint venture once completed.

Development of luxury waterfront communities in prime Abu Dhabi locations

Leveraging Mubadala’s portfolio of prime land across Abu Dhabi, the companies aim to masterplan and develop wellness-focused luxury waterfront communities through a joint venture for two undeveloped islands that sit off the coasts of Saadiyat Island and Yas Island. The combined gross development value of the projects stands at AED 13 billion ($3.5 billion).

The first island sits between Saadiyat Marina and Reem Island along 3km of waterfront. The site, which will be acquired from Mubadala by the joint venture, complements Aldar’s luxury living offering in Saadiyat Cultural District. The joint venture will also acquire a 3.7 million square metre island that sits between Yas Island and Al Raha from Mubadala and will be developed as a premium waterfront villa community.

Development of a landmark logistics park

Mubadala and Aldar are also seeking to develop a AED 5 billion ($1.4 billion) Grade A industrial logistics park in Al Falah with a gross floor area of 1.2 million square metres. The development is strategically located within a 2km radius of Zayed International Airport with easy access to a number of major highways.