GCC Real Estate Fund concludes its First Real Estate Acquisition in Kuwait
Global Investment House "Global" announced today the conclusion of its first land acquisition in Hadiya area in the State of Kuwait, as part of its GCC Real Estate Fund management strategy.
Mr. Sameer A. Al-Gharaballi, Executive Vice President at Global said that the company is continuously going through researches and seeks all investment opportunities in the GCC countries that have resulted in this acquisition.
“This is the first local investment for the fund since it has been launched back in December 2005, and it came as a result of through analysis of the real estate market to match the findings with the fund’s strategy, leading to this acquisition in Hadiya area,” he added.
Mr. Al-Gharaballi explained that the land size is 12,000 sq. meter and will be combined and subdivided into 28 plots to be developed as middle income residential units within two years.
“The demand on such villas in similar places like Hadiya is rising, six villas have been booked already prior to construction which gives the fund the confidence that the villas will be sold in a short time.”
The Global EVP stated that this investment is a joint venture with the Fund Advisor, Alargan Int’l Real Estate Company, adding that the total value of the investment is USD11.9 million, including investor’s equity of USD1.7 million and the remaining amount will be financed in accordance with the Shariah principles.
Hadiya area is one of the new residential areas in Kuwait, lying approximately 30km south of Kuwait City. The land is undeveloped which is divided into 14 residential development plots that consists of plot sizes ranging from 800 sqm to 1,200 sqm. The land is currently bordered on either side by modern residential villa development and municipal service road. The land is situated in close proximity to a highway and has easy access to the area’s supermarket and a local school.
This site is flat in nature and has no visible obstacles to future development and it has full access to mains water, electricity, and municipality services.
On the other side, Mr. Al-Gharaballi revealed that the operating committee of the fund is currently undergoing the final stage of the due diligence process on two development opportunities in Qurum and South Hail in Sultanate Oman and another development opportunity in Sar in Kingdom of Bahrain.
Mr. Al-Gharaballi pointed out that the projected return on equity on the investment is approximately 16%, and the expected time of completion is two years.
Al-Gharaballi followed by saying that the fund has fully completed its first closing, and the fund now is opening the doors again to those who missed the opportunity to invest in the fund and to the existing investors who want to increase their contribution.
The second subscription will take place in April where there are indications to raise USD50 million and reach USD100 million as a fund size due to the high demand for Mid-Low income end users house units in the GCC countries which signifies strong returns, he concluded.
The GCC Real Estate Fund was launched in April 2005 with the objective of investing into development projects and income producing assets focusing on residential development assets for low-middle income end-users, and in accordance with Sharia’a Compliant Principles.
The fund aims to take advantage of the current boom in the real estate sector and the great demand for low-middle income houses in the GCC markets.
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