MIDDLE EAST - Geni Capital LLP (Geni), the London-based asset manager, has teamed up with AREIT Management Limited to launch a commercial property opportunities fund to take advantage of recently-adjusted property values in the Middle East.
The Geni GCC Commercial Real Estate Opportunities Fund will target commercial real estate investments in the Gulf Corporation Council (GCC) States, which include Bahrain, Saudi Arabia, Kuwait, Oman, Qatar and the United Arab Emirates (UAE).
Geni plans to launch the fund in the second half of May with at least USD $100m (€77.8m) and raise capital through high-net-worth individuals, funds, institutions and family offices in Europe, Asia and the GCC States, according to Chris Purdon, chief investment officer at AREIT Management Limited.
"We see a number of reasons to focus time and effort on Saudi Arabia, which offers a particularly compelling demographic (70% of the population is under 30 years old), a building stock which requires significant re-investment and upgrading, and a stated desire at government level to liberalise the economy and make it more attractive to foreign investment."
The fund, due to close to investors on 30 April 2009, is structured as a five-year closed-ended limited partnership (LP) based in the Cayman Islands but may be extended by up to two years to allow for the optimal disposal of assets.
It aims to invest as much as possible in the first 18 months and will focus on purchasing offices, logistics centres, warehouses, vehicle parking and workers' accommodation.
The current corrective phase of property values, further GDP expansion and the ongoing shortage of commercial space in the GCC States offer attractive opportunities for the fund, claimed Stephen Williams, head of sales and business development at Geni.
"The fundamental and economic indicators across the GCC continue to point to economic growth and we believe strong returns can be achieved over the term of the fund. In many ways, the current state of the global financial markets and a recent adjustment in real estate valuations, work to our advantage in the timing of the launch of this fund."
The fund has already secured the backing of a financial institution affiliated to AREIT and has a pool of potential investors, but it may also work with placement agents to generate wider investor interest.
Set up in 2006, Geni advises on and structures bespoke investment products for institutional, high-net-worth and family office investors.
AREIT Management Limited is the manager of the Arab Real Estate Investment Trust (AREIT) and is one of the few international firms that have been granted a licence by the Saudi Arabian General Investment Authority (SAGIA) to trade high value real estate assets.
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