Abu Dhabi’s sovereign wealth fund may be having second thoughts about its real estate investment strategy as the pandemic ravages certain asset classes.
The Abu Dhabi Investment Authority, one of the biggest government-backed investment funds, is reviewing financial performance of the shopping malls and office buildings in its portfolio, Bloomberg News reported, citing anonymous sources. Depending on the outcome, the authority may consider reducing its exposure to some troubled investments.
The retail and office markets were among the most impacted by the pandemic. Shopping malls had already been struggling amid the rise of e-commerce, and the work-from-home phenomenon has led employers to rethink their physical footprints.
At least in New York City, ADIA had started reducing its office real estate footprint before the pandemic: In March 2020, just days before the city went into lockdown, it sold a 40-story Midtown office tower to German insurance company Munich RE for $900 million.
ADIA has about $700 billion in assets under management, of which real estate accounts for about 5 to 10 percent, according to the outlet. The Abu Dhabi fund may redirect its real estate investments to logistics, life sciences, technology hubs and affordable housing.[Bloomberg News] — Akiko Matsuda