Al Dar Properties · ADX:ALDAR
Al Dar Properties — Aldar Investment Properties — Debt Investor Presentation (May 2023)
39 slides from Al Dar Properties's debt investor presentation, May 2023
Slide 1: Fixed Income Investor Presentation
FIXED INCOME INVESTOR PRESENTATION Aldar Investment Properties May 2023
Slide 2: Disclaimer
CONFIDENTIAL DISCLAIMER IMPORTANT: You must read the following before continuing. The attached presentation is a summary of certain proposed terms of an offering of securities as currently contemplated and has been prepared solely for discussion and feedback purposes and on the basis of your accepta
Slide 3: Speaker Biographies
CONFIDENTIAL SPEAKER BIOGRAPHIES Faisal Falaknaz Chris Wilson Daniele Vecchi James Finucane Pamela Chahine Group CFSO, Aldar CFO, Aldar Investment Corporate Finance & Associate Director, Group Head of Investor Relations Properties PJSC Treasury Treasury ▪ Faisal is Acting Group Chief ▪ Chris Wilson
Slide 4: Table of Contents
CONFIDENTIAL TABLE OF CONTENTS 01 Introduction and Background 4 02 Business Overview 11 03 Financial Overview 19 04 Green Finance Framework 23 05 Transaction Overview 29 A1 Operating Environment 32 A2 Financial Statements 37 AIP Fixed Income Investor Presentation 4
Slide 5: Introduction and Background
1. INTRODUCTION AND BACKGROUND
Slide 6: Aldar Investment Properties Has an Established Track Record
CONFIDENTIAL ALDAR INVESTMENT PROPERTIES HAS AN ESTABLISHED TRACK RECORD Aldar Investment Properties – Highlights Region’s largest diversified real estate investment company with highest non-GRE credit rating at 1 Baa1 Recurring revenues of USD 504mn in FY 2022 with visible growth prospects through
Slide 7: Largest Diversified Real Estate Ownership Platform in the Region
CONFIDENTIAL LARGEST DIVERSIFIED REAL ESTATE OWNERSHIP PLATFORM IN THE REGION Aldar Investment Properties LLC ("AIP"), rated Baa1 with stable outlook by Moody’s, owns and operates a diverse and high- quality property portfolio across the UAE, predominantly in Abu Dhabi AIP owns stable and recurring
Slide 8: AIP Shareholding Structure
CONFIDENTIAL AIP SHAREHOLDING STRUCTURE AIP Shareholders Abu Dhabi’s largest diversified One of the largest asset asset management and real managers serving many of the estate company world’s most prominent investors 88.1% 11.9% Strong corporate governance Largest diversified real estate with seven
Slide 9: AIP Flagship Assets
CONFIDENTIAL AIP FLAGSHIP ASSETS Diverse portfolio across commercial, residential, retail and logistics segments COMMERCIAL RESIDENTIAL RETAIL LOGISTICS ADGM Towers Al Rayyana Yas Mall Abu Dhabi Business Hub ▪ Low-rise development located ▪ 3rd largest mall in the UAE ▪ 4 Grade-A commercial adjacent
Slide 10: Strong Relationship with the Government of Abu Dhabi
CONFIDENTIAL STRONG RELATIONSHIP WITH THE GOVERNMENT OF ABU DHABI Aldar Properties PJSC originally Highest rated sovereign in spun-out of Mubadala to MENA activate real estate investment in Aa2/AA/AA (all stable) Abu Dhabi Moody’s/S&P/Fitch 100% Government is a sizeable / long One of Abu Dhabi’s ter
Slide 11: Abu Dhabi Real Estate Market Strengths
CONFIDENTIAL ABU DHABI REAL ESTATE MARKET STRENGTHS Recent federal law changes to enhance UAE’s competitiveness through long-term visas and 100% foreign ownership Abu Dhabi government directly and Strong macro fundamentals with one of through GREs remains a key tenant the highest GDP/capita levels i
Slide 12: Business Overview
CONFIDENTIAL 2. BUSINESS OVERVIEW
Slide 13: AIP's Leading Management Team
CONFIDENTIAL AIP’S LEADING MANAGEMENT TEAM The management team responsible for Aldar’s historical asset management business has assumed non- executive board roles in AIP and brings over 45 years of experience with Aldar Aldar Investment Properties – Management Bios Jassem Busaibe Jassem has over 20
Slide 14: Portfolio Overview
CONFIDENTIAL PORTFOLIO OVERVIEW1 Commercial Residential Retail Logistics No. of Properties 14 properties 12 properties 34 properties 2 properties Gross Leasable area (“GLA”) / 463k sqm 7,123 units 532k sqm 166k sqm No. of Units Occupancy 87% 97% 91% 91% Weighted Average Unexpired 4.0 years 2.8 years
Slide 15: Acquisition Strategy
CONFIDENTIAL ACQUISITION STRATEGY Pursuing portfolio growth opportunities through… …while adhering to 4 key principles… 01 Acquiring high quality income generating assets (from Aldar Properties PJSC and/or Balancing longer third-party entities) leases, providing Limiting concentration certainty, whi
Slide 16: 2022 Capital Deployment
CONFIDENTIAL 2022 CAPITAL DEPLOYMENT Significant activity in 2022 across existing and new markets and segments: c. USD 1,500mn of capital deployed, 7 - 8% stabilized NOI yield on investments FY 2021 2022 Capital Deployment FY 20222 Logistics 7% Logistics 3% Commercial Retail Retail 19% 8% 46% Retail
Slide 17: Recent Developments
CONFIDENTIAL RECENT DEVELOPMENTS March 2019: February 2022: July 2022: Sold Al Murjan Tower June 2019: March 2021: Acquired Al Hamra Acquired 4 Grade-A for USD 79mn Acquired full ownership of Etihad Acquired 636 Mall in Ras Al commercial buildings in achieving a 6.6% Plaza and Etihad Airways Centre
Slide 18: High Quality and Diversified Tenant Mix
CONFIDENTIAL HIGH QUALITY AND DIVERSIFIED TENANT MIX Key Highlights Examples of Tenants Lease Tenor Low tenant concentration risk Within 1 year 20% Over 5 years Reputable “sticky” tenants (majority are 30% GREs or international entities) Mostly bulk tenants leasing large spaces 2 to 5 years High ten
Slide 19: Leasing Strategy Protects & Grows Rental Income
CONFIDENTIAL LEASING STRATEGY PROTECTS & GROWS RENTAL INCOME AIP’s tenancy contract structure ensures current income is protected, including no termination clauses on majority of leases, and future income grows via contracted rest escalations ✓ ✓ ✓ Active Tenant Typical lease terms Lease contracts m
Slide 20: Financial Overview
CONFIDENTIAL 3. FINANCIAL OVERVIEW
Slide 21: Recurring Revenue Stream with Long WAULT
CONFIDENTIAL RECURRING REVENUE STREAM WITH LONG WAULT (2.8 TO 4.8 YEARS) Key Messages Revenue Breakdown ✓ Recurring Revenues (USD 504mn for FY 22): AIP revenues are Logistics 3% underpinned by the acquisitions of ADGM office towers, strong Retail performance at Yas Mall, improved occupancy across th
Slide 22: Robust Balance Sheet with Low Debt and Resilient Asset Valuation
CONFIDENTIAL ROBUST BALANCE SHEET WITH LOW DEBT AND RESILIENT ASSET VALUATION Prudent funding strategy with an LTV policy up to 40% of GAV Total Debt & Gross Asset Value Liquidity (USDbn) Aldar Investment Properties Total Debt Gross Asset Value LTV Outstanding ▪ Sukuk: USD 1.0bn Debt (31 Dec 22) ▪ B
Slide 23: Conservative Leverage Metrics & High Interest Coverage
CONFIDENTIAL CONSERVATIVE LEVERAGE METRICS & HIGH INTEREST COVERAGE Total Debt to Total Assets Interest Coverage Leverage Ratios Healthy debt to asset ratio highlighting AIP’s prudent financing High interest coverage (4.0x in 2022) with contracted long- Leverage ratios expected to decline as rental
Slide 24: Green Finance Framework
CONFIDENTIAL 4. GREEN FINANCE FRAMEWORK
Slide 25: Aldar's Green Finance Framework Overview
CONFIDENTIAL ALDAR’S GREEN FINANCE FRAMEWORK OVERVIEW Aldar has established its Green Finance Framework in line with its broader sustainability commitment The Framework has been Key Framework Highlights assessed by Sustainalytics to be aligned with sustainable finance market standards and best pract
Slide 26: Aldar's Green Finance Framework in Detail
CONFIDENTIAL ALDAR’S GREEN FINANCE FRAMEWORK IN DETAIL Aldar’s Framework is aligned with the four core components of ICMA’s GBP and LMA’s GLP Use of Proceeds Process for Project Evaluation and Selection Project Category Eligibility Criteria Members Projects Investment in new or existing commercial o
Slide 27: Second Party Opinion from Sustainalytics
CONFIDENTIAL SECOND PARTY OPINION FROM SUSTAINALYTICS Aldar’s Green Finance Framework has a Second Party Opinion from Sustainalytics Credible and impactful and aligns with the four core components of GBP 2021 and GLP 2023 Alignment ▪ Use of Proceeds – aligned with GBP / GLP with the ▪ Project Evalua
Slide 28: Key 2022 Aldar Sustainability Highlights
CONFIDENTIAL KEY 2022 ALDAR SUSTAINABILITY HIGHLIGHTS Good progress in our sustainability strategy Economy ▪ Recirculated USD 2.1 bn to the local economy by awarding contracts to ICV-certified companies ▪ Trained 400+ suppliers on sustainability Community ▪ Announced first Sustainable City in Abu Dh
Slide 29: AIP Fixed Income Investor Presentation
CONFIDENTIAL Aldar is committed to seeking validation from the SBTi for their targets once SBTi publishes their methodology for the buildings sector in 2023. Scope 1 emissions are direct emissions from owned or controlled sources Scope 2 emissions are indirect emissions from the generation of purcha
Slide 30: Transaction Overview
CONFIDENTIAL 5. TRANSACTION OVERVIEW
Slide 31: Indicative Term Sheet
CONFIDENTIAL INDICATIVE TERM SHEET Issuer ▪ Aldar Investment Properties Sukuk Limited Obligor ▪ Aldar Investment Properties LLC Obligor Rating ▪ Baa1 (stable) by Moody’s Sukuk Rating ▪ Baa1 by Moody’s Status of Certificates ▪ Senior unsecured Sukuk Structure ▪ Wakala / Murabaha Format ▪ Regulation S
Slide 32: Sukuk Structure
CONFIDENTIAL SUKUK STRUCTURE Master Purchase Service Agency Agreement Purchase Undertaking / Agreement Sale Undertaking The Obligor The Obligor The Obligor (as Seller) (as Service Agent) (as Purchaser) Usufruct Remaining Servicing of Purchase Rights to Incentive Exercise Usufruct Rights Wakala Price
Slide 33: Appendix 1: Operating Environment
CONFIDENTIAL APPENDIX 1 OPERATING ENVIRONMENT
Slide 34: One of the Most Attractive & Stable Investment Destinations Globally
CONFIDENTIAL ONE OF THE MOST ATTRACTIVE & STABLE INVESTMENT DESTINATIONS GLOBALLY Abu Dhabi presents a unique opportunity to earn one of the highest spreads to sovereign returns on institutional-grade real estate in AA-rated USD pegged economy ▪ Abu Dhabi contributes the majority of the UAE’s GDP (U
Slide 35: Positioned for Significant Growth
CONFIDENTIAL POSITIONED FOR SIGNIFICANT GROWTH DIVERSIFIED COMMITMENT TO BOLD FISCAL AGENDA ADVANCING PPP / ECONOMY SUSTAINABILITY AND PRIVATIZATION POLICY REFORMS AGENDA Investments beyond oil Through Dubai Clean Increasing local residency, Significant opportunity for with growth in sectors such En
Slide 36: Bold Fiscal Agenda and Policy Reforms
CONFIDENTIAL BOLD FISCAL AGENDA AND POLICY REFORMS In addition to supportive macro fundamentals, Abu Dhabi is underpinned by progressive policy / legislative reform and structural attributes Federal law changes to Fiscal stimulus to support Number of Key Initiatives and Maturation of real estate enh
Slide 37: UAE – Strong Growth Prospects Despite Global Headwinds
CONFIDENTIAL UAE – STRONG GROWTH PROSPECTS DESPITE GLOBAL HEADWINDS Latest IMF World economic outlook report revised UAE growth forecast upwards while downgrading global forecasted growth 2023 GDP Growth Forecast(%) 2024 GDP Growth Forecast(%) October 2022 Forecast April 2023 Forecast October 2022 F
Slide 38: Appendix 2: Financial Statements for Aldar Investment Properties
CONFIDENTIAL APPENDIX 2 FINANCIAL STATEMENTS FOR ALDAR INVESTMENT PROPERTIES
Slide 39: Income Statement, Cashflow Statement, Balance Sheet & Key Ratios
CONFIDENTIAL INCOME STATEMENT, CASHFLOW STATEMENT, BALANCE SHEET & KEY RATIOS OF ALDAR INVESTMENT PROPERTIES (SUMMARY) Income Statement (USD mn) 2020 2021 2022 Revenue 409 419 504 Finance income 2 1 7 Finance cost (72) (66) (88) Net finance cost (71) (65) (81) Depreciation (1) (1) (2) Provisions (10
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