ABU DHABI 24 December,2020: Aldar Properties has signed an agreement to divest its two district cooling assets on Abu Dhabi’s Saadiyat Island to National Central Cooling Company (Tabreed) for a total consideration of Dh963 million.
Aldar had purchased a 100 percent stake in Saadiyat District Cooling LLC (SDCL) and an 85 percent stake in Saadiyat Cooling LLC (SCL) as part of a wider acquisition of assets from Tourism Development and Investment Company (TDIC) in 2018.
The transaction is expected to complete in the first quarter of 2021, unlocking an internal rate of return of over 40 percent on the original equity investment by Aldar, who has actively managed the asset since its acquisition in 2018. Proceeds will be used to finance further growth of Aldar’s diversified portfolio of high-quality income-generating property, said Wam.
SDCL and SCL provide district cooling to Saadiyat Island in the UAE’s capital, Abu Dhabi, which is home to the Louvre Abu Dhabi and developing rapidly into a major cultural and tourism centre. Aldar is developing premier residential and mixed-use destinations on Saadiyat Island, including Al Mamsha and Saadiyat Grove, and owns extensive plots of infrastructure-enabled prime land on the island for future development.
In 2019, the Abu Dhabi Department of Energy (DoE) issued the District Cooling Regulations and the District Cooling Applicability Regulations, becoming the first regulatory authority in the MENA region to set up a complete integrated system for district cooling. Both SCL and SDCL will be the first District Cooling schemes to receive the new license in Abu Dhabi, supporting the DoE’s commitment to taking the lead in the regional and global energy sector, and its focus on developing infrastructure, ensuring energy efficiency, and promoting sustainable solutions.
This is the latest major transaction by Aldar this year. The company signed an agreement with ADQ, an Abu Dhabi holding company, in late November to manage over Dh30 billion of capital projects. That deal significantly increases Aldar’s fee-based third-party development management business, which is also working on government contracts to manage an upgrade of infrastructure on Saadiyat Island and in the Mina Port area of Abu Dhabi.