Abu Dhabi’s Sovereign Wealth Fund may have doubts about its real estate investment strategy as the pandemic is destroying certain asset classes.
Abu Dhabi Investment Authority, one of the largest government investment funds, analyzes the financial performance of shopping malls and office buildings in its portfolio, Bloomberg News reports, citing anonymous sources. Depending on the outcome, the authority may consider reducing exposure to certain problem investments.
Retail markets and office space were among the hardest hit by the pandemic. Shopping malls were already struggling amid the rise of e-commerce, and the work-from-home phenomenon has forced employers to rethink their physical footprints.
At least in New York, ADIA began to cut its office space before the pandemic: in March 2020, just days before the city was blocked, it sold 40-story office tower in Midtown to a German insurance company Munich RE for $ 900 million…
According to the publication, ADIA manages assets worth about $ 700 billion, of which real estate accounts for 5 to 10 percent. The Abu Dhabi Foundation can redirect its real estate investments to logistics, life sciences, technology centers and affordable housing.
[Bloomberg News] – Akiko Matsuda