Abu Dhabi’s Aldar Investments appoints new CEO, signs Dhs1.2bn deal with Etihad

Abu Dhabi’s Aldar Investment Properties has signed a Dhs1.2bn deal with Etihad Airways to acquire full ownership of Etihad Plaza and Etihad Airways Centre, it was announced on Wednesday.

The two properties, along with the Etihad Airways headquarters, were previously held in three 50/50 joint ventures between Aldar Properties and Etihad.

As part of the deal, Etihad will now take 100 per cent ownership of its HQ.

The transaction is expected to complete in Q2 2019, a statement said.

Aldar Investments, a wholly-owned subsidiary of property developer Aldar, was launched in September 2018 as a diversified real estate investment company.

Read: UAE’s Aldar Properties creates new subsidiary with Dhs20bn assets

This is the first major transaction for the company.

The company also announced that it has appointed Jassem Saleh Busaibe as its CEO.

Busaibe, who has worked with Senaat, Arady Properties and Invest AD, was previously serving as the chairman of Khidmah – which was acquired by Aldar Properties in September last year.

He will also now serve as the chief investment officer at Aldar Properties.

“The acquisition of Etihad Plaza and Etihad Airways Centre allows us to drive value as we take these assets into our larger real estate platform, enabling greater capital efficiency, grow our net operating income and ultimately, free cash flow that can support future dividend growth,” he said.

Etihad Plaza is a mid-rise residential development which houses Etihad employees in apartments ranging from one to four bedrooms and is fully leased to Etihad on a long-term lease expiring 2034. It also offers a retail units comprising offices and medical facilities for Etihad Airways, and retail and food & beverage units which are leased out to third parties.

Located within one of Aldar’s completed developments in Al Raha Beach, Al Muneera, Etihad Airways Centre comprises predominantly office space and a retail offering. The offices are fully leased to Etihad Airways on a long-term lease expiring 2032. The majority of the ground floor retail units are sublet to retailers such as Carrefour, Jones the Grocer, Style and Smile and Al Wahda Pharmacy, with Etihad Airways occupying the remaining retail space on the ground floor.

Overall, the deal adds 789 residential units, 17,940 sqm net leasable area (NLA) of office space and 11,000 sqm NLA of retail space to Aldar Investments’ portfolio.

As part of the transaction, Aldar will assume existing debt within the Etihad Plaza and Etihad Airways Centre JVs, which will be kept in line with Aldar Investment’s established debt policy to hold 35-40 per cent loan to value, the statement said.

Full ownership of these assets will enable Aldar Investments to report annualised annual net operating income of Dhs100m, previously reported as a share of profits from the JV.

Aldar Investments also expects long leases at the units to provide “solid visibility of income”.