London (Commonwealth) _ Aldar Properties of Abu Dhabi has agreed to purchase developer London Square in its first acquisition outside the Middle East.
Adllar Properties would gain a’meaningful footing’ in the Capital as a result of the transaction, which has an enterprise value of 1.07 billion dirhams (£230 million). Adlar said on Friday that it will assist London Square’s acquisition plan in order to “develop larger and prime central London sites.”
Aldar is 25% held by Abu Dhabi’s sovereign wealth fund and 26% controlled by International Holding Company, which is part of Sheikh Tahnoon bin Zayed al-Nahyan’s commercial empire and brother to the nation’s president.
London Square was founded in 2010 and is well known for the Nine Elms development near Battersea Power Station. With 3,500 finished residences and another 930 under construction, London Square now has a development pipeline worth more than £2 billion.
The firms expect the merger to boost revenues because of the prospects for cross-selling across their respective consumer bases. In December 2021, London Square agreed to pay £400 million for the last three phases of the Nine Elms Park development site.
Over 750 luxury houses, affordable housing, and 21,500 square feet of commercial and retail space are part of the development.
According to Talal Al Dhiyebi, Aldar Properties’ group chief executive officer, the acquisition of London Square symbolizes the company’s first entry into the market outside of the region and is a testimony to the business’s leadership team, management framework, and business model, which has consistently produced excellent results.
The deal, which is mutually beneficial in nature, allows us to scale London Square while introducing the best of Aldar to work in the UK’s property marketplace as we continue to expand beyond the region, he said.
The UK housing market has lost most of its impetus in the last year as a result of 14 consecutive interest rate rises by the Bank of England. Over the past year, the Bank of England’s aggressive run of interest rate hikes to curb skyrocketing inflation has driven mortgage rates sky-high.
The average five-year fixed mortgage rate peaked in July at 6.37 percent, but has since fallen. The average five-year fixed mortgage rate was 2.75 percent two years ago. This has added hundreds of pounds to the average homeowner’s annual mortgage bills, and millions of refixers have been caught off guard. The rate increases are estimated to affect 7.5 million homes.
‘This is an incredible accomplishment for London Square,’ said Adam Lawrence, founder and CEO of London Square. Aldar is an exceptional firm with an unrivaled reputation, and its strength, depth of expertise, and experience will allow London Square to thrive and expand its footprint throughout Greater London and the Southeast.
Aldar Properties in Abu Dhabi has around 750 luxury houses, affordable housing, and 21,500 square feet of commercial and retail space.
The property market in the United Kingdom soared during the epidemic but lost most of its momentum after the Bank of England hiked interest rates 14 times in a row between December 2021 and August of this year, before stopping in September.
According to a July poll, increased interest rates have impacted the housing industry and various other corporate sectors. Gulf governments, headed by Saudi Arabia and the UAE, are increasingly pursuing global transactions through state-backed enterprises as part of a goal to turn local companies into regional and global giants.
Emirates Telecommunications Group of Abu Dhabi purchased a 9.8% interest in Vodafone last year for around $4.4 billion, eventually increasing it to 14.6% by April of this year. Saudi Arabia’s STC Group purchased a 9.9% interest in Telefonica for 2.1 billion euros in September, becoming the Spanish telecom giant’s largest shareholder.
