Global Launches GCC Real Estate Fund- II
Global Investment House "Global" announced today the launch of Global GCC Real Estate Fund- II, a close ended fund dedicated to capitalizing on investment opportunities in the countries under the GCC region. The fund's target capitalization is USD 500 million.
Mr. Omar El-Quqa, Executive Vice President at Global stated, “we are very excited about the launch of our second fund focusing on real estate opportunities in the GCC region. Our GCC Fund-I received excellent response from the investors and was invested within the prescribed time.”
He added, “the GCC market dynamics support our decision to launch the GCC Real Estate Fund-II. Appreciation in the oil prices in the recent years has positively affected various aspects of the GCC economy. Additionally, reform initiatives by GCC governments, increased cross-border trade and foreign investments have supported growth of infrastructure activities and investments in the region”.
Talking about the regional focus of the fund, Mr. El-Quqa said, “the fund will explore exciting opportunities in all the GCC countries and will have specific focus on real estate projects in the UAE, KSA and Qatar.
Mr. Shailesh Dash, Senior Vice President, Head- Alternative Investment Group at Global, said that the idea of the establishment of new GCC Real Estate Fund-II has been inspired by the success of the GCC Real Estate Fund–I.
The fund will target its investment in a diversified portfolio of opportunistic and value added real estate properties in the GCC region, through investment structures designed to achieve short to medium-term capital appreciation in accordance with Shari’a Principles.
"Real Estate ownership rules and regulations in the GCC region are being revised to accommodate cross-border investments amongst member countries and the increased transparency in the real estate sector has resulted in capital inflows from outside the region. All these factors will have a strong positive impact on demand for all type of Real estate opportunities in the region."
He affirmed that there are several other factors that have led Global to launch this fund. The region's real estate is booming, the sector is supported by strong performance of the GCC economies and the introduction of regulatory reforms to support cross-border investments in the real estate sector.
Growth of real estate in GCC countries are ever expanding as its GDP is higher than that in the other regions. The rental yields continue to be in excess of 8% in GCC as compared to 3-6% visible in more mature markets such as UK, Europe and Hong Kong.
He further explained that leading capital sources and Fund Managers from the Middle-East are working on reallocating their real estate investments to reduce focus on US because of imminent recession threats, limit new investments in Europe, and have generally shown increasing interest in emerging Asian and MENA markets.
Mr. Dash concluded, " we believe that Global Real Estate Fund II offers its regional and international investors an opportunity to capitalize on the region's flourishing real estate sector and also allowing them to augment and diversify their portfolios."
Mr. Rakesh Patnaik, Vice President & Head – Real Estate Funds at Global Investment House, informed, “the fund intends to invest in a wide spectrum of real estate opportunities covering commercial, residential, industrial and hospitality projects in the region.
The investment strategy of the Fund is very unique and will focus on investments in opportunistic assets including land parcels, distressed properties which can be acquired at attractive valuations and can be repositioned for better returns, assets nearing completion which offer potential for value addition and capital appreciation, investment in equities of listed real estate companies and also pre-IPO opportunities.
The fund also intends to invest 25-30% of the capital into development opportunities, with the objective of benefiting from high IRR’s and profit sharing.”
Mr. Patnaik further added, “the fund will get a preferred access to the deal flow because of Global’s presence in 16 locations, its past track record established through its private equity and principal investments in real estate space and a strong and experienced team of real estate professionals. The fund intends to generate a gross return of around 25% at the fund level.”
Mr. Patnaik concluded, “Global, in the capacity as the sponsor and fund manager, has already seeded the fund and has identified a healthy pipeline of real estate opportunities within the GCC countries.”
Al-Rayah International Consulting and Training will act as the fund’s Shari’a consultants
