World Trade Centre in Sao Paulo.
Barwa unit closes first Shariah fund in Brazil
Doha, May 29, 2012
The First Investor (TFI), the investment banking division of Qatar-based Barwa Bank Group, has announced the closing of the first Shari'ah compliant closed-end income generating fund in Brazil.
The TFI-Hines Brazil Income Real Estate Fund is a joint venture between Barwa bank and US-based Hines International Real Estate Holdings.
Hines boasts of a 14 year track record in Brazil, having set up its office in Sao Paulo in 1998. Since then, the US firm has developed or acquired over 17 million sq ft of property in cities in Brazil with an additional 6 million sq ft in design or under construction.
Launched in March, the TFI-Hines Brazil Income Real Estate Fund offers investors substantial risk adjusted returns through high quality, proprietary real estate investment opportunities.
It has a target size of $500 million and is expected to achieve a net leveraged IRR of 10.5 per cent to 12.5 per cent for investors. Furthermore, it targets to distribute an average annualized yield of 8 per cent (quarterly distribution) on the invested capital over the life of the fund.
The fund recently completed its first seed acquisition by investing in the iconic World Trade Centre complex in Sao Paulo, said Barwa Bank, a cornerstone investor in the fund.
Commenting on the move, Mohammed Al Saad, vice chairman of Barwa Bank Group, said, 'The WTC complex possesses an extremely diversified and high-quality revenue stream which has huge upside potential due to the synergies amongst the different business components of the complex.'
'The asset will provide an attractive, long term income stream to investors,' he added.
Located in the heart of Sao Paulo, the complex provides a unique service offering that includes office, retail, and hospitality components along with the largest convention center in South America all in a premier business location.
On the venture, Al Saad said, 'This represents the second collaboration between TFI and Hines. We are happy to give investors the opportunity to invest in a Shari'ah compliant manner in Brazilian real estate sector.'
David McGinnis, the chief investment officer, said, 'The Fund will focus on high-quality assets in premium locations with limited competitive supply. It will seek assets with high-quality tenant credit to ensure stable and predictable cash flows and promising expectation for capital appreciation.'
David Clarke, the TFI chief executive officer said, 'With Brazil set to host the 2014 Football World Cup and 2016 Olympics, the timing of this launch could not be more compelling.'
'These will further enhance the economics of the country and will help the fund to source even more attractive investment opportunities,' he added-TradeArabia News Service