(Bloomberg) -- Apollo Global Management Inc. signed a deal to invest $1.4 billion in Aldar Properties PJSC as the private equity giant deepens its investments in Abu Dhabi’s real estate market.
As part of the transaction, Apollo will take a direct minority stake in Aldar Investment Properties, one of the largest foreign direct investments in Abu Dhabi’s private sector, according to a statement. The deal is expected to close in the first quarter.
The investment follows a consortium led by Apollo agreeing to inject billions of dollars into the real estate assets of Abu Dhabi’s oil company. The private equity firm also has a strategic partnership with Mubadala Investment Co., one of Abu Dhabi’s sovereign wealth funds.
Aldar, which primarily operates in Abu Dhabi, has been chasing growth in a cramped market. At home, the developer is growing its management business, and beyond the United Arab Emirates it has gained a foothold in Egypt through the acquisition of a majority stake in Sodic.
Apollo deal is structured as:
$500 million: investment into a land joint venture
$500 million: perpetual subordinated notes issued by Aldar Investment Properties
$300 million: mandatory convertible preferred equity investment in Aldar Investment Properties
$100 million: common equity investment in Aldar Investment Properties
Aldar said last week it plans to spend 5 billion dirhams ($1.36 billion) on acquisitions this year to grow its portfolio of revenue-generating properties. The company reported a 21% increase in full-year profit, supported by “strong performance” across group businesses.