Earlier this week Bloomberg reported that Abu Dhabi is forming a $12 billion property giant by consolidating key real estate assets under one entity. This move aims to strengthen the emirate's economic transformation efforts.
As part of this strategic move sovereign wealth fund ADQ and International Holding Co. (IHC), the most valuable listed firm in Abu Dhabi, will merge their shareholdings in Modon Properties and ADQ's stake in Abu Dhabi National Exhibitions Co. into a new real estate firm called Q Holding.
THE FORMATION OF Q HOLDING
Q Holding will issue instruments convertible into 9.49 billion shares at a fixed price of 2.70 dirhams per share to ADQ and IHC. This valuation will make the company worth 18.5 billion dirhams ($5.04 billion). So the company will be a significant player in the region's real estate landscape.
With an implied market value of about $12 billion, Q Holding will become one of the largest entities of its kind in the region. The firm's portfolio will include real estate developments, venues, land plots, and hospitality assets.
DIVERSIFYING THE UAE'S ECONOMY
ADQ and IHC have been leading efforts to diversify the UAE's economy away from its reliance on oil. The creation of Q Holding is an opportunity to further these ambitions and support Abu Dhabi's economic growth in line with the Abu Dhabi Economic Vision 2030.
PROMISING OUTLOOK FOR Q HOLDING
Shares in Q Holding surged 15 percent to 2.97 dirhams after the announcement. So there is already optimism surrounding the merger.
Equally, Sheikh Tahnoon bin Zayed Al Nahyan, the United Arab Emirates' national security adviser, oversees both IHC and ADQ. His role in the companies further highlights the importance and influence of this consolidation in the UAE's real estate sector.
Post-merger, ADQ will own 38.7 percent of Q Holding, while IHC Capital will hold a 19.4 percent stake in the new real estate giant. This consolidation is expected to bring significant opportunities and advantages to Abu Dhabi's real estate sector.
