Abu Dhabi’s sovereign investor Mubadala, Aldar Properties and US alternative investment manager Ares Management have teamed up to jointly invest $1 billion in a new European private real estate credit platform, to tap into opportunities in the key markets of the region.
Mubadala will own a 50 per cent stake in the new venture, while Aldar, Abu Dhabi’s largest listed developer, and Los Angeles-based Ares will hold 30 per cent and 20 per cent, respectively, the companies said on Wednesday.
The three organisations’ combined capital commitments for the platform are expected to grow to about $2 billion eventually and, including anticipated leverage, the total available capital is projected to surpass $5 billion, they said.
“This new platform leverages the collective strengths of each party to invest in the private real estate credit market in the UK and Europe,” Omar Eraiqaat, deputy chief executive of disruptive investments at Mubadala, said.
“This collaborative approach reflects our shared commitment to identifying and capitalising on unique investment opportunities that deliver sustainable, long-term returns.”
In addition, Aldar will invest a further $100 million into an existing European private real estate credit strategy that was first established by Mubadala and Ares in 2021.
That platform focuses on senior secured debt with a first lien on physical real estate assets, including those in the office, multifamily residential, industrial, retail and hospitality sectors.
“This partnership is wholly unique, blending financial strength, a proven track record and in-depth knowledge of the real estate sector and asset classes,” said Talal Al Dhiyebi, group chief executive of Aldar Properties.
“It is an ideal opportunity in terms of timing to gain both high quality exposure to a key asset class and a solid foothold in a market that is not only scalable but that also offers favourable risk-adjusted returns through market cycles.”
The creation of the platform also follows Aldar’s expansion into the UK with its $291 million purchase of developer London Square earlier this month, marking its first acquisition outside the Middle East and North Africa as the company grows its geographical footprint.
“The strategy is focused on investing in mature markets outside of Aldar’s home region and aims to accelerate the company’s growth through diversifying its revenue and geographic presence and increasing its portfolio and investment exposure to high-growth alternative real estate asset classes,” it said.
Private credit, or non-bank lending, is an increasingly important element of real estate finance in mature markets.
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