Abu Dhabi considers real estate assets consolidation to create $12 billion company

ADQ and International Holding Company propose wrapping property and events stakes into Q Holding

The combined entity will have an extensive portfolio of real estate developments, venues, land plots and hospitality assets. Khushnum Bhandari / The National

Abu Dhabi is looking to consolidate key real estate assets under a single entity, establishing a Dh44 billion ($12 billion) property giant, in a move to support the emirate’s economic transformation efforts.

Under the proposed deal, Abu Dhabi’s investment and holding company ADQ and a unit of local conglomerate International Holding Company have submitted an offer to combine their shareholdings in Modon Properties into IHC's Q Holding.

ADQ will also add its shareholding in Abu Dhabi National Exhibitions Company (Adnec) into Q Holding as part of the deal.

The proposed transaction would create one of the largest real estate, hospitality, events and catering platforms in the region that would enhance Abu Dhabi’s position as an integrated real estate and hospitality leader, ADQ said in a statement on Wednesday.

The combined entity will have an extensive portfolio of real estate developments, venues, land plots and hospitality assets, ADQ said in a statement on Wednesday.

“This proposed offer provides a unique opportunity to generate value by bringing together key real estate and hospitality assets, creating an Abu Dhabi champion that fuels its ambitions,” Mohamed Alsuwaidi, managing director and chief executive at ADQ, said.

“The combined assets would benefit from increased scale and new revenue opportunities that will position it well for future growth.”

As part of the transaction, Q Holding will issue to ADQ and IHC Capital an instrument that would convert to about 9.49 billion shares in the capital of Q Holding. The price at which the instrument will convert into shares in Q Holding is Dh2.70 per share.

The offer implies an equity valuation of Dh18.5 billion for Q Holding, the company said.

Following the completion of the deal, ADQ and IHC Capital would respectively own 38.7 per cent and 19.4 per cent of the entire issued share capital of Q Holding.

“The proposed transaction of consolidating Abu Dhabi’s leading tourism and real estate assets into Q Holding will prove to be significantly beneficial to the growth and the development of the industry,” Syed Shueb, IHC’s chief executive and managing director, said.

“We envision this as a strategic alignment that will not only magnify our capacity for exceptional real estate development but also effectively bridge the gap between tourism and real estate sectors that is poised for further growth and expansion.”

In a separate statement on Wednesday, Q Holding confirmed receiving the offer from ADQ and IHC Capital, and said its board will consider the proposed transaction before making any recommendation to shareholders.

“Should an agreement be reached between the parties, a Q Holding general assembly meeting would consider approving the transaction in November,” Q Holding said in a statement to the Abu Dhabi Securities Exchange, where its shares are traded.

Established in 2018, ADQ has a broad portfolio of major enterprises with investments in energy and utilities, food and agriculture, health care and life sciences, and mobility and logistics.

IHC, which plays a key role in supporting the diversification of the UAE economy, invests in agriculture, brokerage and financial services, entertainment, health care, industries, entertainment, retail, real estate, energy and maritime industries.

The conglomerate, which has more than 422 subsidiaries, including Alpha Dhabi Holding, Q Holding, International Securities, Al Seer Marine and Multiply Group, has made several strategic investments in recent months to expand its asset base.

The company has grown to become one of the most valuable listed holding companies in the Middle East and had total assets of Dh227.5 billion at the end of 2022, up from Dh88.98 billion at the end of 2021.

This year, ADQ and IHC announced plans to create the region’s largest multi-asset class investment manager.

Q Holding, set up in 2005, operates across sectors such as property, services and hospitality, and has diversified investments through its subsidiaries. The company, formerly known as Al Qudra Holding, has been expanding its portfolio.