Ares Management is teaming up with Middle East investors Aldar Properties and Mubadala Investment Company to create a new partnership to jointly invest $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 per cent stake in the new platform, with 30 per cent held by Aldar and the remaining 20 per cent by Ares.
Additionally, Aldar will invest $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 $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 $5 billion.
What they said
Talal Al Dhiyebi, Group CEO of Aldar Properties said: “Private credit is an increasingly important element of real estate finance in mature markets. With the rising prevalence of non-bank lending, as credit conditions tighten and stricter capital requirements are implemented, we see a substantial opportunity for Aldar as a strategic real estate investor.
“This partnership between Mubadala, Ares, and Aldar is wholly unique, blending financial strength, a proven track record and in-depth knowledge of the real estate sector and asset classes. It is an ideal opportunity in terms of timing to gain both high quality exposure to a key asset class and a solid foothold in a market that is not only scalable but that also offers favourable risk-adjusted returns through market cycles.”
Phil Moore, partner and head of European Real Estate Debt in Ares Real Estate, said: “The global opportunity for flexible private real estate lenders continues to grow as we see ongoing retrenchment of traditional sources of capital. We remain focused on leveraging our cycle-tested team, global market perspective and disciplined approach to capitalize on our high conviction sectors, including the residential, mixed-use and adjacent spaces, all of which continue to benefit from attractive supply/demand dynamics.
"Our most recent investments reflect our ability to step into complex situations and provide flexibility up and down the risk/return spectrum at scale. We look forward to further pursuing attractive lending opportunities and executing on our debt investment strategy in Europe alongside Mubadala and Aldar.”