Case Studies
Breaking records on land leases
Situation
The EC&FZ Cluster is a linchpin in AD Ports Group’s strategy of becoming a world-class provider of integrated ports, logistics and industrial and economic zone services, catering to the requirements of flagship, long-term business clients whose operations draw on services from other clusters within the Group.
In a challenging year marked by pandemic uncertainty, the Economic Cities & Free Zones Cluster (EC&FZ) of AD Ports Group generated record revenue and profit again as it inked new land leases in the life sciences, bio pharma, food, renewable energy, and agritech sectors.
Solution
During the year, the EC&FZ Cluster leased approximately 3 million m2 of land for industrial use, largely matching 2020 levels, while signing major investors such as Lepidico of Australia, which is building a AED 348 million lithium battery plant, and China’s Shandong Ports Group, which together with AD Ports Group, will build and operate a 150,000 m2 tyre storage and distribution city at Khalifa Industrial Zone Abu Dhabi (KIZAD).
In 2021, EC&FZ Cluster once again leveraged its “build-to-suit” approach to attract new tenants, such as Shandong Group, by co-investing in their partner’s business.
Leveraging its land bank of more than 550 km2, the EC&FZ Cluster continued to expand and solidify its market position in 2021 as the largest integrated trade, logistics and industrial hub in the United Arab Emirates, making up 55% of UAE industrial zones and 12% of industrial zones in the six-country Gulf Cooperation Council (GCC).
The EC&FZ Cluster leased approximately 3 million m2 of land for industrial use
Outcome
EC&FZ Cluster is on track in 2022 to more than quadruple AD Port Group’s cold storage capacity for pharma, food, and medicines to 91,000 m2, supporting the Group’s long-term commitment to be a major distributor of COVID-19 and other vaccines to the UAE and more than 60 countries around the world.
Shandong Tyre City is expected to also generate revenue for the Ports and Logistic clusters of AD Ports Group. Driving synergies and cross-selling across clusters helped boost EC&FZ Cluster revenue in 2021, as tenants were in the food, bio pharma, metals, and life sciences sectors. A major impulse to the bio pharma initiative was EC&FZ Cluster’s ability to rapidly acquire and ramp up 19,000 m2 of state-of-the-art cold storage capacity to store 120 million COVID-19 vaccines.
Acquired and ramped up 19,000 m2 of state-of-the-art cold storage capacity to store 120 million COVID-19 vaccines.
Also driving performance at EC&FZ Cluster were ongoing synergies from the merger of KIZAD and ZonesCorp, whose combined footprint of industrial, economic and free trade zones across the Emirate of Abu Dhabi has attracted top-tier tenants such as Amazon, Emirates Global Aluminium, Abu Dhabi National Oil Company (ADNOC), Borouge and Al Futtaim Motors.
Cluster revenue also benefitted from the 2021 creation of the Razeen isolation and quarantine camps during COVID-19, new land leases and higher utility revenues, which mitigated the transfer of businesses to other clusters. Natural gas supply to tenants rose 11% to 16.07 million British Thermal Units (MM BTU).
By attracting new global and regional tenants to its industry and economic hubs, such as Metals Park, Tyre City and the 138 million m2 Rahayel Automotive and Mobility City, the EC&FZ Cluster is committed to driving growth into 2022.
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