Abu Dhabi’s largest developer Aldar Properties has announced that it has created a new subsidiary Aldar Investments to handle some of its highest revenue generating assets.
Aldar Investments will have assets worth $5.4 billion and is expected to help Aldar drive “greater operational and capital efficiencies” that could improve shareholders’ returns, the government-linked company said in a statement.
The move is also expected to help Aldar access capital more easily, independently of its parent company. Aldar Investments, which has been assigned a Baa1 rating by Moody’s, also plans to issue a new sukuk in the near term, the statement added.
Aldar’s move to spin-off the unit comes as Abu Dhabi’s real estate market continues to soften as supply outpaces demand in the emirate. The listed-developer owns close to 5,000 residential units and over 500,000 square meters of retail and commercial space in the emirate.
With Aldar Investments, Abu Dhabi hopes to generate improved returns from diversifying its real estate assets portfolio and by acquiring other income-producing assets. The company added that it will be actively looking for ways to diversify from the traditional real estate classes but did not indicate any details.
Aldar Properties, which was initially singularly focused on Abu Dhabi, is now looking at new areas to invest in. The company recently formed a joint venture with Dubai developer Emaar Properties to invest in real estate projects worth $8 billion both locally and internationally.