Apollo to invest $1.4 billion in Abu Dhabi developer Aldar

The commitment will be made by Apollo-managed funds and clients and include a $500 million investment in a land joint venture.

 A general view shows the headquarters of Aldar Properties at Al Raha Beach in Abu Dhabi, January 28, 2013.  (photo credit:  ALDAR-SOROUH/REUTERS/BEN JOB)
A general view shows the headquarters of Aldar Properties at Al Raha Beach in Abu Dhabi, January 28, 2013.
(photo credit: ALDAR-SOROUH/REUTERS/BEN JOB)

Apollo Global Management will invest $1.4 billion in Abu Dhabi developer Aldar Properties, including a land joint venture and an equity investment in the company's real estate unit, the pair said on Monday.

The commitment will be made by Apollo-managed funds and clients and include a $500 million investment in a land joint venture and a $100 million common equity investment in Aldar's real estate investment unit, the companies said.

New York-based Apollo would also invest $800 million in the unit, Aldar Investment Properties, through perpetual subordinated notes and mandatory convertible preferred equity, they said.

The land acquired in the joint venture from Aldar's landbank could later be developed or sold. Apollo will hold a minority stake in the real estate investment unit through the common equity investment,

"Aldar’s ability to attract a long-term partner such as Apollo underscores the strength of Aldar’s business franchise," Aldar Chief Executive Talal Al Dhiyebi said.

 Gurjit Singh, chief development officer of Aldar Properties, attends a meeting with Reuters correspondents during the Reuters Middle East Investment Summit in Dubai October 28, 2013.  (credit: REUTERS/CAREN FIROUZ) Gurjit Singh, chief development officer of Aldar Properties, attends a meeting with Reuters correspondents during the Reuters Middle East Investment Summit in Dubai October 28, 2013. (credit: REUTERS/CAREN FIROUZ)

Apollo Chief Executive Marc Rowan said Apollo was "pleased" to serve as a long-term capital partner to Aldar.

The transaction is expected to close in the first quarter. The cash proceeds would be used to fund Aldar's growth plans.

Aldar last week said it planned to spend nearly $1.4 billion of existing capital this year acquiring recurring revenue-generating assets such as commercial and residential property.