ADNOC and ADPF sign strategic real estate investment partnership

The agreement is ADPF’s largest single transaction with ADNOC to date

Abu Dhabi National Oil Company (ADNOC) announced today that it has signed and entered into a strategic real estate investment partnership with the Abu Dhabi Pension Fund (ADPF). This is the third partnership between ADPF for energy infrastructure and real estate assets with ADNOC and the largest single transaction to date with the oil giant.

The ADPF partnership follows ADNOC’s announcement in September 2020 that it has made a long-term strategic investment with accounts and companies owned and / or advised by Apollo Global Management Inc. and its subsidiaries, one of the world’s largest alternative investment managers . and a group of institutional investors for an underlying real estate portfolio valued at $ 5.5 billion.

Under the agreement, ADPF will acquire a 31% stake in Abu Dhabi Energy Real Estate Company – Sole Proprietorship LLC, which was formed to increase ADNOC’s 51% stake in Abu Dhabi Property Leasing Holding RSC Limited (hereinafter referred to as “ADPLHC”) for consideration of $ 900 million.

ADPLHC was founded to use rental income from selected ADNOC properties under a 24-year master lease. ADPLHC holds long-term leases based on a sizeable, diversified portfolio of ADNOC properties across the emirate of Abu Dhabi.

Upon completion of the transaction, ADNOC will own 69% and ADPF 31% of ADEREC, while Apollo and its subsidiaries will continue to directly own 49% of ADPLHC. ADNOC retains full ownership and control of the selected real estate and social infrastructure assets as well as responsibility for all operations and maintenance.

His Excellency Dr. Commenting on the transaction, Sultan Al Jaber, Minister for Industry and Advanced Technology of the United Arab Emirates and CEO of ADNOC Group, said: “We are pleased to again partner with Abu Dhabi Pension Fund, the custodian and long-term investor of the savings the citizen of the UAE. This innovative partnership strengthens ADNOC’s ability to add and add value to our unique energy infrastructure and real estate base while creating attractive opportunities for the UAE’s long-term financial well-being.

“By establishing our real estate investment partnership with Apollo last year, ADNOC was able to monetize its strategic infrastructure assets outside of oil and gas and reinvest the proceeds in our core business to achieve further growth. The partnership structure continues to ensure that ADNOC retains full ownership and control of our real estate assets, further strengthens our balance sheet and allows for greater capital flexibility. “

For ADPF, this new investment offers yet another opportunity to access high quality leased assets with superior, risk-adjusted return and income profiles and to secure long-term, recurring and stable cash flows. The portfolio of assets is expected to achieve high occupancy and high rental prices in the future.

His Excellency Jassim Buatabh, Chairman of the Board of Directors of the Abu Dhabi Pension Fund, said this agreement is yet another example of the fruitful collaboration with ADNOC and a continuation of the Fund’s efforts to build strong and diversified investment partnerships locally and internationally.

“We look forward to expanding our partnership with ADNOC, one of the most important national companies helping to promote economic growth in the emirate of Abu Dhabi. This agreement is in line with the fund’s investment strategy, which aims to invest in high quality diversified portfolios in order to achieve the maximum possible value, ”said Jassim Buatabh.

Since announcing the expansion of its partnership and investment model and optimizing assets and capital in 2017, ADNOC has entered the debt market for the first time and has issued a $ 3 billion bond backed by the Abu Dhabi Crude Oil Pipeline . partially listed ADNOC Distribution, the first IPO of a company in the ADNOC Group; and entered into several strategic investment partnerships, including in the areas of drilling, refining, fertilizing and trading. ADNOC also has key investment partnerships with the world’s leading institutional investors and operators of its oil and gas pipeline infrastructure.