Aldar invests Dhs1b to expand its logistics real estate business

Aldar invests Dhs1b to expand its logistics real estate business

10 January 2024, Gulf Today

Aldar Properties has announced that it is investing a further Dhs1 billion to expand its logistics real estate business in Dubai and Abu Dhabi. Having first entered the logistics sector with the majority acquisition of Abu Dhabi Business Hub (ADBH) in 2022, this new investment includes acquiring operational assets and developing ready-to-lease and build-to-suit options in response to strong demand for Grade A logistics facilities.

Marking its first logistics acquisition in Dubai, Aldar has bought 7 Central logistics hubs and an adjacent plot, which, once developed, will almost double the current gross leasable area (GLA) of 19,000 sqm.

The facility, which was sold by Seven Seas Steel Industries, is strategically positioned in one of Dubai’s most established industrial areas, Dubai Investments Park.

The company 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 that will be developed in partnership with established logistics real estate players, and a 33,000 sqm GLA expansion of the company’s premium logistics facility, ADBH, in Abu Dhabi.

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

Talal Al Dhiyebi, Group Chief Executive Officer of Aldar Properties, said, “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.”

The growth of the UAE’s logistics sector is supported by substantial investment into transportation and infrastructure to support the 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. Tenants are in various sectors, primarily focusing on third-party logistics (3PL), e-Commerce and retail.

Meanwhile Abu Dhabi Islamic Bank (ADIB) has arranged an Dhs1 billion sustainable bilateral facility for Aldar Properties (Aldar).

The financing takes Aldar’s total ESG financing facilities to Dhs4.8 billion as the company transitions towards sustainable financing for its projects and investments. The transaction underscores both entities’ commitment to supporting environmentally beneficial projects aligned with the UAE Net Zero by 2050 strategic initiative.

ADIB acted as the sole facility provider and Aldar intends to utilise the proceeds to finance sustainable projects such as green buildings, property upgrades to enhance energy efficiency, sustainable water management, pollution control measures, and renewable energy sources.

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