Aldar acquires Kezad assets for $155m to boost industrial property portfolio

Aldar Properties, Abu Dhabi's biggest listed developer, has acquired two logistics assets from a unit of AD Ports Group for Dh570 million ($155.2 million), as it continues to expand its industrial portfolio.

The deal involves two facilities at Khalifa Economic Zones Abu Dhabi (Kezad), which are currently being used by UAE e-commerce platform Noon and fibre-optics company Emtelle, respectively, Aldar said on Wednesday.

Noon's fulfilment centre and Emtelle's factory cover a combined area of more than 136,000 square metres, and have direct connectivity to Khalifa Port, Etihad Rail and motorways.

Jassem Busaibe, chief executive of Aldar Investment, said the acquisition was part of "Aldar’s strategy to scale its logistics and industrial platform in the UAE, while further strengthening our expansive recurring income business".

"The Grade A assets acquired from AD Ports Group are strategically located and occupied for the long term, ensuring stable income generation," he added.

Demand for logistics and industrial sectors has grown in the UAE, with e-commerce gaining traction as consumers increasingly opt to buy online.

Abu Dhabi and Dubai have become hotspots for industrial property, driven by logistics, manufacturing, retailers and traders, consultancy Knight Frank reported.

Aldar has been expanding into the sector as part of its diversification efforts. Last month, Aldar announced it was investing $1 billion to build a series of new develop-to-hold properties in areas surrounding Abu Dhabi's Zayed International Airport to expand its presence in the residential, commercial and logistics sectors.

Aldar also bought a commercial tower for Dh2.3 billion at Dubai International Financial Centre amid higher demand for office space in the emirate, making further inroads into the commercial sector.

Kezad, meanwhile, is the largest operator of integrated economic zones in the UAE, with its infrastructure and services spanning 12 such areas in Abu Dhabi, Al Ain and Al Dhafra region, covering a total of 550 square kilometres.

"This transaction ... highlights the attractiveness of our assets and the strength of Abu Dhabi’s industrial and logistics real estate market, which continues to see robust demand from global investors," said Abdullah Al Hameli, chief executive for economic cities and free zones at AD Ports Group.

Cinco in numbers

Dh3.7 million

The estimated cost of Victoria Swarovski’s gem-encrusted Michael Cinco wedding gown

46

The number, in kilograms, that Swarovski’s wedding gown weighed.

1,000

The hours it took to create Cinco’s vermillion petal gown, as seen in his atelier [note, is the one he’s playing with in the corner of a room]

50

How many looks Cinco has created in a new collection to celebrate Ballet Philippines’ 50th birthday

3,000

The hours needed to create the butterfly gown worn by Aishwarya Rai to the 2018 Cannes Film Festival.

1.1 million

The number of followers that Michael Cinco’s Instagram account has garnered.

The Voice of Hind Rajab

Starring: Saja Kilani, Clara Khoury, Motaz Malhees

Director: Kaouther Ben Hania

Rating: 4/5

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

Essentials

The flights
Emirates flies direct from Dubai to Seattle from Dh6,755 return in economy and Dh24,775 in business class.
The cruise
UnCruise Adventures offers a variety of small-ship cruises in Alaska and around the world. A 14-day Alaska’s Inside Passage and San Juans Cruise from Seattle to Juneau or reverse costs from $4,695 (Dh17,246), including accommodation, food and most activities. Trips in 2019 start in April and run until September.

Living in...

This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.