Bahrain-based Ithmaar Development Company, the development arm of the Ithmaar banking group, Kuwait-based Al Safat Investment Company (ASIC), the parent company of Al Safat Group, and Bahrain-based Arabian Ventures announced the launch of a US$ 500 million Sharia-compliant real estate fund targeting real estate assets in Latin America. The closed-ended Fund will have an initial term of five years.
“In the last few years economic stability has started to take hold in Central and Latin America, which has resulted in unprecedented growth in the region’s real estate sector. The robust development of capital markets in Mexico, Brazil, Argentina and Costa Rica has increased liquidity, a clear indicator of positive, economic progress,” said Ithmaar Bank Chairman, Khalid Abdulla-Janahi.
Waleed Ahmad Al Sharhan, Chairman, Al Safat Investment Company stated, “A long-awaited period of sustained economic growth is finally occurring in much of Latin America. After decades of failed economic policies, much of the region is slowly entering an era of stability and productivity. This growth has direct co-relation to the upward spiral in the real estate sector in the region. Real estate development activity is gaining traction, although demand outstrips the supply.”
The Latin American Real Estate Fund provides sophisticated investors in the GCC with the opportunity to participate in the growth these developing markets are currently experiencing. The Fund is expected to provide a financial boost to local real estate markets in Latin America, and also benefit GCC regional investors by delivering profitable returns.
Arabian Ventures CEO, Mishal Al Jarallah added, “Central and Latin America have become increasingly market friendly in recent years. This trend, along with the political stability that many countries in the region are currently enjoying, has created significant opportunities in many economic sectors, not least in the booming real estate sector. Arabian Ventures is always on the lookout for interesting opportunities in emerging markets, and is pleased to be working with such prestigious partners on this project.”
Many countries in Latin America have benefited greatly from a commodity boom which has seen regional trade grow at a rate of 10 percent annually since 2005, fuelling demand in the real estate sector. In addition, Latin America has a characteristically young population, with between 30 to 40 percent of the population aged less than 20 years, further contributing to the surge in housing and real estate developments.
Abdullah A. Al-Shaheen, Chief Executive Officer, Al Safat Investment Company, observed, “The Latin American Real Estate Fund provides us with a platform to participate in the growth and development of Latin America. ASIC will continue to target investments in selected geographical locations and sectors in order to benefit from cyclical upturns, while diversifying risk. ASIC’s philosophy for private equity is to build value through a combination of conservative capital structures, sound business strategies, proper execution and Sharia compliant investment, which is the focal point of everything, the company does.”
Ithmaar Development Company Chief Executive Officer, Mohammed Khalil Al Sayed said, “The launch of Latin American Real Estate Fund reinforces our position as a leading player in the global real estate development sector. Our entry into Latin America signals our intention to further expand our geographical footprint, while providing attractive returns to investors in the region.”
This Fund will provide the benefits of investing in Private Equity in general, and in a well diversified Sharia-compliant Real estate Fund in particular, which should be beneficial to investors, given the current state of upheavals of the Global capital markets. The Fund’s strategy is to leverage the Ithmaar Development Company’s & ASIC’s financial, strategic and managerial expertise, unlocking the investment’s potential and increasing valuations upon exit.
