x Abu Dhabi, UAEThursday 27 July 2017

Mubadala buys into US property company

The Government-controlled fund has acquired 24.9 per cent of the US property company John Buck.

Mubadala Development Company, the Government-controlled fund, has acquired 24.9 per cent of the US property company John Buck, officials said on Thursday. The amount paid was "below US$50 million" (Dh183.7m) according to a source close to the company. "This investment provides us with access to the US real estate market in multiple product types and it complements the existing joint venture we have together," said Waleed al Mokarrab al Muhairi, chief operating officer of Mubadala. "Our investment will allow us to co-invest with them in future opportunities and supports our objective of achieving world-class returns through partnerships with industry-leading companies."

The acquisition is part of the growth of Mubadala's property and hospitality division, which was officially announced at Cityscape Abu Dhabi in May. The division is developing strategic property developments in Abu Dhabi, particularly boutique hotels, high-end office space and lifestyle-driven residential communities. In March it created a joint venture with John Buck, called John Buck International, that is developing a new central business district on Sowwah Island. It also set up a venture with CapitaLand of Singapore, called Capitala, to build 140-hectare residential project called Arzanah at Zayed Sports City. In September, Mubadala announced it had acquired 50 per cent of California-based Kor Hotel Group, which has two boutique hotel brands that will open outposts in Abu Dhabi and the Middle East.

Mubadala also owns a 17 per cent stake in Aldar Properties, the Emirate's largest developer, and is an investor in a major Malaysian property development. The investment comes at a difficult time for major property developers in the US, who are confronted with falling prices. A recent report from the property consultancy Jones Lang Lasalle said downtown Chicago office vacancies could increase by 50 per cent over the next two years. Commercial office construction is a major source of John Buck's revenue.