Masdar Green REIT bolsters portfolio with AED934mln sustainable real estate acquisition
Abu Dhabi: Masdar Green REIT, the UAE’s first Real Estate Investment Trust to invest solely in sustainable real estate assets, has completed the acquisition of property worth AED934 million, taking its portfolio value to AED1.91 billion, with further assets identified for potential future investments.
The announcement, made by the fund’s manager Masdar Capital Management Limited (MCML) today at Abu Dhabi Finance Week, follows a US$200 million green loan secured from First Abu Dhabi Bank (FAB) in January to help finance the REIT’s growth.
Masdar Green REIT was established by Masdar as an investment vehicle for professional investors to invest in a professionally managed, sustainable, income-generating real estate portfolio in Masdar City.
The fund’s latest acquisitions include two fully occupied, LEED Platinum-rated buildings within Masdar City, Abu Dhabi’s pioneering sustainable community and innovation hub: the head office of Abu Dhabi Quality and Conformity Council, and Etihad Airways’s Eco Residences complex. A third property acquired, the Technology Innovation Institute headquarters, is LEED Gold certified. All three assets have achieved a 3 Pearl rating under the Abu Dhabi Estidama Pearl Building Rating System.
Anthony Taylor, Senior Executive Officer of MCML, said this second expansion phase demonstrated that sustainable urban development was a compelling commercial proposition, as well as environmentally responsible.
He said: “Climate-resilient development is essential if we are to reach net zero. The success and growth of Masdar Green REIT to date shows a credible pathway exists to achieve it. The fact that the REIT has more than doubled in assets in the two years since incorporation underlines the potential for sustainable real estate development in the region. It further highlights the broad appeal to investors of Masdar City, as a burgeoning innovation hub and thriving sustainable community.”
Masdar Green REIT was launched in December 2020 with an initial portfolio of four commercial properties at Masdar City. These properties are the IRENA Building, home to the International Renewable Energy Agency and ENEC (Emirates Nuclear Energy Corporation), the Siemens Building, home to Siemens, Abu Dhabi Customs and the Tabreed HQ, and The Incubator building, occupied by Masdar City and Masdar Freezone, among others.
Together, the original properties cover a net leasable area of 58,063 square meters and were acquired at a value of AED948 million. As of December 31, 2021, the portfolio was valued at AED980 million, reflecting a gain of around AED32 million.
The Masdar fund offers the opportunity to raise third-party capital from its established real estate portfolio, while ensuring the integrity and, most importantly, the sustainability of the real estate assets within Masdar City. Following the new acquisitions and the green loan drawdown, Masdar Green REIT provides future investors access to a diversified portfolio with a high occupancy of 98% and an average unexpired lease term of over six years.
With its new portfolio and established track record, Masdar Green REIT is now entering its next exciting chapter where it will target professional investors for cornerstone equity participation as it grows its portfolio with additional, pre-identified sustainable assets, within Masdar City, and in the wider UAE in years to come.
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About Masdar Green REIT
Established in the Abu Dhabi Global Market (ADGM) under the private real estate investment trust (REIT) regime, Masdar Green REIT is the first in the UAE to invest solely in sustainable real estate assets. Classified as a Qualified Investor Fund (QIF), Masdar Green REIT offers an attractive opportunity for professional investors to invest in a unique portfolio of stable, income-generating, sustainable real estate assets located in Masdar City, and the UAE.
The REIT is managed by Masdar Capital Management Limited, which is regulated by the Financial Services Regulatory Authority.
The Masdar Green REIT marks significant progress in bringing the Abu Dhabi Sustainable Finance Declaration to life, which was signed in 2019 by 25 public and private sector entities, including Masdar City and the ADGM. It is aimed at establishing a healthy and sustainable finance industry that supports the UAE in attaining the United Nations Sustainable Development Goals.
About Masdar City
Masdar City in Abu Dhabi is one of the world’s most sustainable developments. It is a working model for cities around the world in environmental, economic, and social sustainability, and continues to push the boundaries of innovation. The City hosts Abu Dhabi’s only planned and approved R&D cluster; Masdar City Free Zone, which is a growing hub for sustainability-focused innovative businesses; and a residential neighborhood with restaurants, shops, sporting facilities, and public green spaces. Masdar City is home to companies dedicated to developing innovations across the sectors of renewables, space, energy storage, artificial intelligence, agriculture, health, and mobility. These include the headquarters of the International Renewable Energy Agency (IRENA), the UAE Space Agency, the regional headquarters of Siemens Energy, G42 Healthcare, the Advanced Technology Research Council, several Fortune 500 companies, hundreds of entrepreneurs, a start-up accelerator program via The Catalyst, and the world’s first university dedicated to artificial intelligence: the Mohamed bin Zayed University of Artificial Intelligence. Masdar City has also pioneered two generations of autonomous vehicles and continues to extend the frontiers of alternative and sustainable transport.