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Abu Dhabi Pension Fund to Partner with ADNOC in Real Estate Investment Partnership

Abu Dhabi Pension Fund to gain further financial exposure to high-quality ADNOC assets with superior, long-term risk-adjusted return and income profile

Partnership allows ADNOC to unlock further value from non-oil and gas strategic infrastructure to redeploy into its core business and strategic growth projects 

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Abu Dhabi – February 2, 2021: The Abu Dhabi National Oil Company (“ADNOC”) announced today, that it has signed and completed a strategic real estate investment partnership with Abu Dhabi Pension Fund (“ADPF”). 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 Inc. and its subsidiaries (collectively “Apollo”) (NYSE: APO), one of the world’s largest alternative investment managers, and a group of institutional investors, for an underlying real estate portfolio valued at $5.5 billion.

Under the terms of the agreement, ADPF will acquire a 31% holding in Abu Dhabi Energy Real Estate Company – Sole Proprietorship LLC (“ADEREC”), the company created to hold ADNOC’s 51% stake in Abu Dhabi Property Leasing Holding Company RSC Limited (henceforth referred to as “ADPLHC”), for a consideration of $900 million. ADPLHC was created to leverage rental income streams from select ADNOC real estate assets under a 24-year master lease agreement. ADPLHC holds long-term leasehold interests underpinned by a sizeable, diversified portfolio of ADNOC real estate assets located across the Emirate of Abu Dhabi. Following the completion of the transaction, ADNOC will hold 69% and ADPF 31% of ADEREC, whilst Apollo and its subsidiaries will continue to directly hold 49% of ADPLHC. ADNOC will maintain full ownership and control over the select real estate and social infrastructure assets, as well as responsibility for all operations and maintenance. 



Commenting on the transaction, His Excellency Dr. Sultan Al Jaber, UAE Minister of Industry and Advanced Technology and ADNOC Group CEO, said: “We are delighted to once again partner with the Abu Dhabi Pension Fund, the custodian and long-term investor of the UAE’s citizens savings. 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 United Arab Emirates. 

“The creation of our real estate investment partnership with Apollo last year enabled ADNOC to monetize its non-oil and gas strategic infrastructure assets and reinvest the proceeds into our core business to deliver further growth. The partnership structure continues to ensure that ADNOC maintains full ownership and control over our real estate assets, while further strengthening our balance sheet and allowing for greater capital flexibility.”

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 cashflows. The  portfolio of assets is expected to achieve strong future occupancy and rental rates.

His Excellency Jassim Buatabh, Chairman of the Board of Directors of the Abu Dhabi Pension Fund, said that this agreement is another example of the fruitful cooperation with ADNOC and is a continuation of the Fund's efforts to build strong and diversified investment partnerships locally and internationally.

“We are pleased to expand our partnership with ADNOC, one of the most important national companies that contribute to boosting the economic growth in the Emirate of Abu Dhabi. This agreement aligns with the Fund’s investment strategy, aimed at investing in high-quality diversified portfolios to achieve the maximum possible value,” said Jassim Buatabh.

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 $3 billion 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.

Today’s agreement continues ADNOC’s successful infrastructure and real estate investment program and the ongoing delivery of its value creation strategy. The quality of this investment into ADNOC’s underlying real estate assets reinforces ADNOC’s role as a catalyst for responsible and sustained investment and value creation for Abu Dhabi and the UAE.

 

Release Details

February 02, 2021
Abu Dhabi

About ADNOC

ADNOC is a leading diversified energy and petrochemicals group. Headquartered in Abu Dhabi, ADNOC is a primary catalyst for the UAE’s growth and diversification. To find out more, visit www.adnoc.ae

For media inquiries please contact:

Philip Robinson
Manager, ADNOC External Relations
+971 (0) 50 504 4934
probinson@adnoc.ae

About Abu Dhabi Pension Fund

Abu Dhabi Pension Fund was established in 2000, according to Law No. (2) of 2000 regarding civil retirement pensions and benefits for the Emirate of Abu Dhabi, is a result of the aspirations of the Abu Dhabi government to improve the level of social life for citizens and secure their future by providing a comprehensive retirement system based on the management of contributions, pensions and end of service for citizens who are working in the governmental and private sectors in the emirate.

Abu Dhabi Pension Fund has set customer service as one of the strategic priorities which it seeks to achieve by continuing to enhance the efficiency of services, their delivery channels and their quality, listening to the customers to identify their needs and harnessing corporate capabilities of data, technical systems and human resources in order to provide retirement services according to the international standards. The Fund succeeded in the comprehensive digital transformation of its services and in achieving the government target in the high quality of service provision.

For media inquiries, please contact: 

Rasha Jamal
ADPF
+971 (0) 2 414 0130
Rasha.jamal@pension.gov.ae