GIH sets up $500m realty fund
Manama, July 10, 2008
Global Investment House (GIH) has launched a $500 million Global GCC Real Estate Fund-II to take advantage of the booming GCC market.
'We are very excited about the launch of our second fund focusing on real estate opportunities in the GCC region,' said Global executive vice-president Omar El Quqa.
'Our GCC Fund-I received excellent response from the investors and was invested within the prescribed time. 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,' he noted.
'Additionally, reform initiatives by GCC governments, increased cross-border trade and foreign investments have supported growth of infrastructure activities and investments in the region,' he added.
El Quqa said the fund would explore opportunities in all the GCC countries but will have specific focus on real estate projects in the UAE, Saudi Arabia and Qatar.
GIH Alternative Investment Group head and senior vice-president Shailesh Dash 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.
'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,' he said.
'All these factors will have a strong positive impact on demand for all type of real estate opportunities in the region.'
Growth of real estate in GCC countries are expanding as its gross domestic product continues to rise faster than other regions.
The rental yields continue to be in excess of eight per cent in GCC as compared to 3 to 6 per cent in more mature markets such as UK, Europe and Hong Kong.
'We believe that Global Real Estate Fund-II offers its regional and international investors an opportunity to capitalise on the region's flourishing real estate sector and also allowing them to augment and diversify their portfolios,' Dash added.
'The investment strategy of the fund is to focus on investments in opportunistic assets including land parcels, distressed properties which can be acquired at attractive valuations, 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 per cent to 30 per cent of the capital into development opportunities.
'It intends to generate a gross return of around 25 per cent at the fund level.
'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,' he said.-TradeArabia News Service
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