Aldar Properties invests Dhs1bn to expand logistics portfolio

UAE’s Aldar Properties said on Tuesday that it is investing a further Dhs1bn to expand its logistics real estate business in Dubai and Abu Dhabi, having forayed into the logistics sector with the acquisition of Abu Dhabi Business Hub (ADBH) in 2022.

The Abu Dhabi-listed property giant has acquired 7 Central logistics hub from Seven Seas Steel Industries in Dubai Investments Park, with an adjacent plot to build further logistics space.

Aldar said that the investment, which includes the acquisition of operational assets as well as the development of ready-to-lease and build-to-suit options, will almost double the current gross leasable area (GLA) of 19,000 sqm.

The developer has also created a healthy development pipeline and will build 233,000 sqm of new Grade A logistics facilities across the UAE. This includes single-tenanted facilities and logistics parks in Dubai, totalling 200,000 sqm of GLA and a 33,000 sqm GLA expansion of the company’s premium logistics facility, ADBH in Abu Dhabi.

“Asset and geographic diversification are core tenets of our growth strategy, and logistics is becoming an important asset class for Aldar. We are experiencing particularly strong demand for high-grade facilities in the UAE, driven by robust intra-regional trade, high-quality infrastructure, and an expanding digital economy,” said Talal Al Dhiyebi, group CEO of Aldar Properties.

“Aldar is well positioned to capitalise on this growth, deploying a unique blend of expertise in development, balance sheet investment, and asset management to create substantial value.”

The ADBH warehouse portfolio is fully leased at its current capacity of 132,000 sqm to diverse institutional tenants, including Etihad, Mubadala and Twofour54.

The growth of the UAE’s logistics sector is supported by substantial investment in transportation and infrastructure, to support diversification of the economy.

Aldar is experiencing strong demand to develop a range of logistics facilities, including supply chain and fulfilment warehouses to last-mile centres, in the form of single-tenanted facilities and larger-scale logistics parks.

Aldar’s investment strategy

With a market capitalisation of Dhs41.8bn as of January 9, 2024, Aldar posted a 48 per cent year-on-year (YoY) increase in Q3 2023 net profit to Dhs949.1m from Dhs613m a year earlier, driven by strong operational performance as the company’s recent acquisitions are positively impacting the bottom line.

Aldar completed the acquisition of UK property developer, London Square, for an enterprise value of Dhs1.07bn (GBP230m) in December, the company’s first major investment outside the Middle East region.

The developer said the transaction should also have a positive impact on sales, given the opportunities to cross-sell across their respective customer base.

The investment in the UK property market was followed by a strategic partnership between Aldar, Abu Dhabi state investor Mubadala and Ares to jointly invest $1bn in European private real estate credit.

Mubadala will hold a 50 per cent stake in the new platform, Aldar has a 30 per cent holding while Ares owns the remaining 20 per cent. The Abu Dhabi-based property developer is reportedly considering investing $100m into an existing strategy that Mubadala and Ares established in 2021.

Read: Aldar Properties acquires UK developer London Square for Dhs1.07bn