Abraaj Capital, the region's leading private equity firm, announced today the first acquisition by its new income-generating real estate fund, ASAS, of a grade-A commercial office building in Cairo, Egypt.
ASAS, which means foundation in Arabic, is a yield-generating real estate fund that complies with the principles of Shari'a. ASAS capitalises on the opportunity resulting from the lack of institutional ownership of commercial real estate in the Gulf and wider Middle East and North Africa (MENA) region, as well as the asset-heavy balance sheets of many regional companies and the severe undersupply in certain real estate sectors.
Structured as a unique blend of quarterly returns and sustained capital stability, ASAS focuses on long-term, income-generating assets in the real estate market. These characteristics of the fund have proven to be appealing to investors at a time when they are focused on cash-flow management.
"The ASAS private equity real estate platform is a demonstration of Abraaj Capital's commitment to its holistic alternative asset management strategy, leveraging the firm's expertise in the region with the support of a dedicated real estate investment team," said Mustafa Abdel-Wadood, Managing Director, Abraaj Capital.
ASAS invests based on the specific requirements of each real estate sector within each country in the MENA region, with the objective of generating yield. In sectors where there is a lack of institutional capital, ASAS focuses on operationally essential assets such as logistics warehouses, education and healthcare facilities, supermarkets, low-to-middle income and corporate housing, infrastructure type assets, and structured real estate transactions with strong counterparties. In sectors where there are large supply-demand gaps, ASAS targets high quality real estate assets in the office and retail sectors.
"ASAS has made its first investment in a fully operational grade-A office building with high-quality multinational tenants," said Faisal Khan, Principal, Abraaj Capital. "The investment rationale is supported by an undersupply of premium office space in Cairo and by attractive economics."