Bridging the Gulf

Capivest, formerly known as Khaleej Finance and Investment, has partnered with two Kuwait-based investors, Kuwait Investment Company and Kuwait Finance House, to manage and promote the Indian Private Equity Fund. The sharia-compliant $200 million (€149 million) fund will target real estate and private equity investments in India and aim for an IRR of more than 25 percent.

KFI chief executive officer Nabil Hadi said that the partnership represents a strategic change in direction for the firm, with the bank expanding beyond its regional focus to make a push for India, which he called one of the most dynamic foreign investment destinations in the world.

The deal is the latest example of Middle Eastern investors making a push into the India property markets. The global Islamic finance industry, valued at $800 billion, is growing by an estimated 15 to 20 percent each year, according to Corecap, a Gulf investment and advisory firm. That capital is increasingly being attracted to India. Emaar Properties, Nakheel, Al Ghurair Group's ETA Star, Al Rostamani Enterprises' KM Properties and Dubai Properties are just a few of the Gulf firms that have announced major plans for investing on the subcontinent.

Gulf region investments into the Indian property market have now surpassed $35 billion, according to Cushman & Wakefield India. Some of the biggest investments this year were the DLF tie-up with Nakheel to develop two townships in India for $10 billion, and the announcement by Dubai-based developer ETA Star Properties that it plans to build a $923 million IT park at Chennai, taking the group's total investment value in India to more than $4 billion.

Analysts have predicted even more inflow from the Gulf into Indian real estate by the end of the year, estimating that up to $2 billion in capital is still to come. The huge economic boom in the Gulf, combined with relatively limited investment opportunities in the Middle East, means that Gulf investors will likely keep looking for real estate opportunities in India and beyond.

Investors in Capivest include the Bahrain Islamic Bank, General Organization for Social Insurance and Gulf Finance House in Bahrain; Gulf Investment House and Kuwait Finance House in Kuwait; and Dubai Islamic Bank in the United Arab Emirates.

Credit Suisse, GE expand infrastructure venture to Asia
Global Infrastructure Partners, a $1 billion (€760 million) private equity joint venture between Credit Suisse and General Electric, has opened an office in Hong Kong where newly appointed partner Mike Nikkel will spearhead the firm's investment efforts across Asia. Prior to joining Global Infrastructure Partners, Nikkel led the development and operations of OneEnergy, an independent power company that is a joint venture between Hong Kong's CLP Holdings and Mitsubishi Corporation. Global Infrastructure Partners, which was established last year, recently acquired International Port Holdings, a port infrastructure vehicle in the UK, as well as London City Airport. The firm also has offices in New York and London.

Aetos, China Life team up for property venture
China Life Asset Management and Aetos Capital have formed a strategic partnership to identify and evaluate real estate investment opportunities throughout China. The joint venture will focus on a wide range of asset types including office, residential, industrial, retail, hotel, and mixed-use properties, in addition to well-located land with development potential. Aetos manages two real estate private equity funds—the $740 million (€570 million) Aetos Capital Asia and the $2.2 billion Aetos Capital Asia II. A source at the firm recently told The Wall Street Journal that it plans to commit $1 billion to China over the next few years. In May, the firm hired a ten-year veteran of Morgan Stanley, Kenny Tse, to lead the alternative investment firm's push into Chinese real estate.

IIB launches $65m Abu Dhabi fund
International Investment Bank, the Bahrain-based investment bank, has launched a $65 million (€50 million) property fund that will invest in land development within the Danet Abu Dhabi Master Development Project, a new urban community in uptown Abu Dhabi. The new fund, IIB-Abu Dhabi Properties I, will be 66.7 percent owned by IIB with the remainder held by UAE-based United Friends Company. The fund will purchase two plots of land at Danet Abu Dhabi to develop a 21-story twin tower building. One of the towers will house office space and the second will combine residential and office units. The site will also include retail and entertainment units and a parking garage. IIB said the fund will exit from the investment within four years and is targeting an annual internal return of 24 percent.

CalPERS, Hines acquire Sao Paulo office building
Houston-based international real estate firm Hines has acquired a 29-story office building in Sao Paulo, Brazil through its partnership with the California Public Employees' Retirement System. The BankBoston building was purchased by the Hines Calpers Brazil II fund from Banco Itaú, which recently acquired BankBoston's banking operations in Brazil. The asset was sold vacant, and Hines Brazil has already initiated leasing efforts. The sale price was not disclosed.

Jones Lang LaSalle merges with Trammell Crow affiliate in India
Global real estate services and money management firm Jones Lang LaSalle has merged its Indian operations with the privately held Indian real estate services company Trammell Crow Meghraj (TCM), creating Jones Lang LaSalle Meghraj. The new company will have 44 million square feet under management in India. The merger adds a significant Indian base to Jones Lang LaSalle's global platform, which already has approximately 160 offices in more than 450 cities in over 50 countries. Trammell Crow Meghraj was formerly an equity partnership between diversified commercial real estate services company Trammell Crow, private financial services company Meghraj Group and real estate investment firm Sundown Group. Jones Lang LaSalle Meghraj will have approximately 2,800 employees in India, with offices in ten cities. The combined firm will have its India head office in Delhi.

Trikona Capital invests $75m in Delhi development
Trinity Capital, a publicly listed London-based fund managed by Trikona Capital, has invested £38 million ($75 million; €58 million) for a 49.4 percent stake in Luxor Cyber City. The large-scale project, which is set to cost £204 million excluding land purchases, is located 25 kilometers from Delhi International Airport and aims to attract IT tenants. According to investment criteria set out in its IPO documents, the firm hopes to achieve internal rate of returns of 25 percent or greater. Trikona was founded by Aashish Kalra and Rak Chugh in early 2006 to take advantage of India's burgeoning real estate market. It floated Trinity on London's Alternative Investment Market last April. With this latest transaction, the firm has invested £206 million in the country.

Broadreach invests in Australian hotel
Broadreach Capital Partners has paid approximately A$50 million ($42 million; €32 million) for the Oasis Resort in Lake Street, Cairns, for its latest fund, BRCP II. The fund, which closed last year with total capital commitments of $700 million, has purchased the 314-room property from Australian finance, tourism and property group MFS. It intends to upgrade the asset while also adding holiday apartments on two adjoining sites. It is the first hotel deal in Australia for the firm, which increased its reach into the hospitality sector in 2005 when Philip Maritz joined from luxury hotel and resort investor Maritz, Wolff and Company, a firm which he co-founded. In Australia, Broadreach has hired former Jones Lang LaSalle broker Geordie Clark to help identify opportunities. Clark is based in Sydney.

DLF Looks to establish three new property vehicles
The DLF Group, an Indian real estate development company that went public in June, is reportedly launching three new private equity vehicles to invest in real estate and infrastructure in India. The three funds will tap foreign investors to fund company projects, according to a report in The Business Standard. The firm is reportedly looking to raise $2 billion (€1.5 billion) for infrastructure development, $1 billion to invest in the luxury hotel sector and $10 billion to invest in two 20,000-acre township projects via a joint venture with UAE-based developer Nakheel. Last year, DLF inked a separate arrangement with Hilton to develop 50 to 75 lodging properties across the subcontinent under the Hilton banner. Meanwhile, DFL is working with Nakheel to develop the township projects in Gurgaon and the South Maharashtra/Goa region.

Morgan Stanley to buy Australian REIT for A$4.7bn
Morgan Stanley Real Estate has offered to acquire Investa Properties, Australia's largest publicly traded office REIT, for A$4.7 billion ($3.9 billion; €3 billion). Including debt, the offer values the Sydney-based company at approximately $5.5 billion. Under the terms of the bid, which has been unanimously approved by the Investa board, Morgan Stanley will offer A$3.08 per share, a premium of 14 percent over the company's closing price on May 30 and a premium of 56 percent over the company's net tangible asset value per share on December 31. At December 31, Investa had assets under management of A$7 billion, including A$4 billion in its office portfolio and A$1.7 billion in its externally managed funds business. The company also has a residential and commercial development platform.

Brookfield makes bid for Multiplex
Brookfield Asset Management, formerly known as Brascan Corp, has submitted an all-cash offer of A$4.3 billion ($3.6 billion; €2.8 billion) to acquire Multiplex Group, an Australian office, retail and industrial property owner. The offer, at A$5.15 per stapled security, values Multiplex at approximately A$7.3 billion on an enterprise value basis. By acquiring Multiplex, Toronto-based Brook-field will gain assets in Australia, New Zealand, the United Kingdom and the Middle East. The company has recommended that its shareholders accept the offer from Brookfield. Speculation about the deal has been swirling for months, driving Multiplex's shares up more than 25 percent on the Australian Stock Exchange over the past six months. Multiplex, which recently completed redevelopment of London's Wembley Stadium, has most of its properties in Australia and New Zealand, including stadiums, theatres and office towers.