Tabreed buys Aldar's district cooling units on Saadiyat Island for Dh963m

The district cooling company will cater to Saadiyat Island, the Louvre Abu Dhabi, NYUAD, and Manarat Al Saadiyat

Aldar Properties agreed to sell its two district cooling units on Saadiyat Island to Tabreed. Christopher Pike / The National

The National Central Cooling Company, also known as Tabreed, is buying two district cooling units on Saadiyat Island from Aldar Properties for Dh963 million ($262m).

The transaction is expected to generate an internal rate of return of over 40 per cent on the original equity investment, Aldar said in a statement to the Abu Dhabi Securities Exchange on Wednesday, where its shares trade. Aldar, Abu Dhabi's biggest listed developer, acquired the two assets from the Tourism Development and Investment Company in 2018.

“This divestment crystalises significant value for Aldar shareholders and is a clear example of our strategy for value creation in action,” Talal Al Dhiyebi, chief executive of Aldar Properties, said. “Aldar is pursuing attractive acquisitions, implementing an active approach to asset management and continuously recycling capital to invest in future growth.”

Saadiyat District Cooling and Saadiyat Cooling provide district cooling to Saadiyat Island, the Louvre Abu Dhabi, NYUAD, and Manarat Al Saadiyat.

Aldar is developing two residential projects on Saadiyat Island, including Al Mamsha and Saadiyat Grove. It also owns infrastructure-enabled land on the island for future development.

“In line with this strategy, Aldar will build on its strong financial and operating performance in 2020 by further deploying capital in the long-term growth of our two core real estate businesses – asset management and development management," Mr Al Dhiyebi said.

This is the latest major transaction by Aldar this year. Last month, the company signed an agreement with ADQ, an Abu Dhabi holding company, to manage over Dh30 billion of projects in the capital.

"Our strategic partnerships have allowed Tabreed to grow into an international powerhouse in district cooling, with over 22 years of experience and investments across six countries," Tabreed's chief executive Bader Saeed Al Lamki, said in a statement to the Dubai Financial Market, where the company's shares trade.

"Our partnership with Aldar is one such example, and this transaction is testament to the strong relationship we enjoy with them,” he added. “Moving forward, we are well placed – both financially and operationally – to continue to take advantage of further growth opportunities in the UAE market and beyond."

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