Partnership allows ADNOC to unlock further value from non-oil and gas strategic infrastructure
The Abu Dhabi National Oil Company (ADNOC) recently announced that it has signed and completed a strategic real estate investment partnership with Abu Dhabi Pension Fund (ADPF). The partnership will enable ADNOC redeploy into its core business and strategic growth projects.
The transaction is ADPF’s third successive energy infrastructure and real estate asset partnership with ADNOC and marks ADPF’s largest single transaction with ADNOC to date.
The ADPF partnership follows the announcement by ADNOC in September 2020 that it had entered into a long-term strategic investment with accounts and entities owned and / or advised by Apollo Global Management 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 US$ 5.5bn.
ADPF stake
Under the terms of the agreement, ADPF will acquire a 31% holding in Abu Dhabi Energy Real Estate Company, the company created to hold ADNOC’s 51% stake in Abu Dhabi Property Leasing Holding Company, for a consideration of US$ 900mn.
“This innovative partnership reinforces ADNOC’s ability to unlock and drive incremental value from our unique energy infrastructure and real estate asset base, while simultaneously creating attractive opportunities for the long-term financial well-being of the UAE,” affirmed Dr. Sultan Al Jaber, UAE Minister of Industry and Advanced Technology and ADNOC Group CEO.
For ADPF, this new investment presents another opportunity to access high-quality lease assets with superior, risk-adjusted returns and income profiles, and lock in long-term, recurring and stable cash-flows. The portfolio of assets is expected to achieve strong future occupancy and rental rates.
“This agreement aligns with the Fund’s investment strategy, aimed at investing in high-quality diversified portfolios to achieve the maximum possible value,” remarked Jassim Buatabh, Chairman of the Board of Directors, Abu Dhabi Pension Fund.
Investment transactions
Since announcing the expansion of its partnership and investment model and its assets and capital optimization in 2017, ADNOC has entered the debt capital markets for the first time, issuing a US$ 3bn bond backed by the Abu Dhabi Crude Oil Pipeline; partially floated ADNOC Distribution, the first-ever IPO of an ADNOC Group company; and entered into several strategic investment partnerships in its drilling, refining, fertilizer and trading businesses, amongst others.
ADNOC has also closed landmark investment partnerships with leading global institutional investors and operators in its oil and gas pipeline infrastructure.
