Prudential Financial Inc., the second-largest U.S. life insurer, is joining with a government-controlled company in Abu Dhabi to bet on luxury residences on the emirate’s Saadiyat Island.
Mubadala Development Co. and the insurer’s real estate arm are 50-50 partners in a venture to buy the first phase of the Saadiyat Beach Residences, the companies said today in a statement distributed by Business Wire.
U.S. life insurers are seeking to expand abroad and bet on real estate as they cope with near record-low interest rates for bonds issued in their home country. The Newark, New Jersey-based insurer’s real estate arm this month named Michael Gallagher to help manage European property-related securities and has made additional hires this year in Asia and Brazil.
“Saadiyat is becoming a true destination for the region, and one which holds the prospect of strong financial returns for our business,” Joe Bonner, chief investment officer of the Mubadala Pramerica Real Estate Investors venture, said in the statement, which didn’t disclose terms of the deal.
The development’s first phase includes 285 units in three buildings. Phase two, scheduled for completion this year, consists of 210 apartments, the companies said in the statement.
The island, with golf courses and luxury hotels, is the future home of the Louvre Abu Dhabi and Guggenheim Abu Dhabi museums, according to the statement. It was developed by the state-owned Tourism Development & Investment Co.
TDIC is building local branches of the Paris and New York museums on Saadiyat Island, which is being developed as part of the United Arab Emirates’ push to diversify its economy away from oil revenue. The $27 billion worth of projects on the island include the Zayed National Museum and a New York University campus. TDIC is also building homes and offices.