Apollo forms $5.5bn real estate partnership

The Abu Dhabi National Oil Company (ADNOC) has teamed up with an investor consortium led by Apollo Global Management to create a $5.5 billion real estate partnership. For the $414 billion alternative investment giant Apollo the deal highlights the firm’s direct origination yield strategy alongside real estate and infrastructure expertise. For ADNOC, the transaction allows them to unlock value from non-oil and gas strategic infrastructure to invest into its core business and strategic growth projects. The investment leverages the rental income streams from select ADNOC real estate assets across the Emirate of Abu Dhabi under a 24-year master lease agreement. The deal is also one the region’s largest real estate transactions and provides investors in the Apollo-led consortium a 49% stake in Abu Dhabi Property Leasing Holding Company RSC. The deal provides ADNOC with proceeds of $2.7 billion and is expected to close before the year end. “We are pleased to partner with Apollo and leverage their world-class real estate asset management expertise to achieve international best practice standards in managing and driving cost efficiencies across our real estate portfolio,” said His Excellency Dr. Sultan Al Jaber, UAE Minister of Industry and Advanced Technology and ADNOC Group CEO. “This strategic partnership allows ADNOC to unlock and monetize significant value from its non-oil and gas strategic infrastructure assets and reinvest into our core business to deliver further growth and realize greater returns. Apollo officials said that the firm originated and structured the transaction, leveraging expertise across its integrated investment platform, including real estate, infrastructure and insurance solutions. “In a market where high-quality, long-dated yield is scared, this transaction allows our institutional and insurance clients, including Athene, to participate in a proprietary investment alongside a world-class company like ADNOC,” said Apollo Chairman, CEO and Founder Leon Black.

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