Aldar Properties, Mubadala Investment Company and Ares Management announced that they have entered into a new partnership to jointly invest USD 1 billion in private real estate credit opportunities in the United Kingdom and Europe over the next three to five years. As part of this transaction, Mubadala will hold a 50% stake in the new platform, with 30% held by Aldar and the remaining 20% by Ares. Additionally, Aldar will invest USD 100 million into an existing European private real estate credit strategy first established by Mubadala and Ares in 2021, which focuses on senior secured debt with a first lien on physical real estate assets, including office, multifamily residential, industrial, retail, and hospitality.

Over time, the Ares European Real Estate Debt strategy is expected to upsize to approximately USD 2 billion in capital commitments from Mubadala, Aldar and Ares funds. Including anticipated leverage, the total available capital for the strategy is expected to be in excess of USD 5 billion. With a total investment of USD 400 million, Aldar will broaden its focus from the traditional equity investments it is known for in the region, to diversifying its investment portfolio across the capital structure by entering the private credit space.

By doing so with reputable and established players ­ from a funding, asset class and sector perspective ­ Aldar is gaining a meaningful foothold in a high growth market, particularly as the market continues to mature and in the context of the strong growth witnessed in non-bank lending. Ares, with approximately USD 49 billion of real estate assets under management and over 250 real estate investment professionals globally ­ will provide a dedicated investment team mandated to cover real estate debt deal origination, portfolio monitoring, and deal pipeline execution. Leveraging a highly collaborative approach across the Ares platform, the Ares European Real Estate Debt team is fully integrated into Ares' global real estate team and benefits from the firm's global leadership position in credit.

Since launching in January of 2022, the Ares European Real Estate Debt team has originated and closed on over USD 1.2 billion of real estate loans across Europe, as of September 30, 2023. The announcement follows Aldar's recent expansion into the UK with the acquisition of London Square, the company's inaugural direct investment beyond the MENA region. Moreover, the investment in UK and European private credit serves as an extension of the company's international expansion strategy.

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.