Global property investment manager CBRE Global Investors (CBRE GI) has formed its first fully Shariah-compliant property platform, following the creation of a joint venture business aimed at placing Arabian Gulf capital in Asian properties.
CBRE GI joined with Saudi Arabian investment manager SEDCO Capital to launch an Asia-Pacific Shariah-compliant property platform, which will target $300 million of equity over the next two years.
The program is not structured like a fund, explained Eduard Wehry, CBRE GI’s head of investor services for Asia Pacific, but more like a platform that brings capital in on a deal-by-deal basis. CBRE GI and SEDCO are expected to target only investors in Saudi Arabia and across the Gulf Cooperation Council region in the Middle East.
Its deal-by-deal approach was agreed in response to the style of investing requested by its prospective investors. “We wanted to cater to what these investors were used to,” Wehry said.
Also to match the investors’ requirements, CBRE GI and SEDCO are intending to invest only in Shariah-compliant, income-producing real estate assets across the Asia-Pacific, with an initial country focus on Japan and Australia.
For the most part, that will limit the platform from investing in any assets that facilitate gambling, restaurants where alcohol is served, or offices primarily rented out to financial institutions. But offices rented out to government entities, for example, as well as the residential and logistics sectors, would all be considered Shariah-compliant, Wehry said.
The platform will be open-ended, and its investments are expected to generate core to core-plus-style returns. Wehry said it is not expected to offer co-investment to investors.
Richard Price, chief executive of CBRE GI in Asia Pacific, called the platform a “significant win” for the firm. “We are delighted to be working with SEDCO Capital, an experienced provider of Shariah-compliant investment solutions, to build a Pan-Asia Pacific real estate portfolio on behalf of Middle Eastern investors,” he said in a statement.
Based in Jeddah, SEDCO Capital provides investment advisory and management services across property, equities, and other businesses. Altogether the firm has advised on more than $3 billion of assets, all on behalf of Shariah-compliant investors, and has invested in real estate for 14 years.
“A hallmark of SEDCO Capital's philosophy has been socially responsible investing and our adherence to the principles of Shariah makes this very seamless and distinguishes us from others,” said Hasan Al-Jabri, chief executive of SEDCO Capital. “With this new and powerful partnership with CBRE Global Investors, we aim to not only continue our legacy but also bring excellent investment opportunities to clients who have interest in Asia Pacific.”
With $90.2 billion assets under management, CBRE GI is the world’s largest real estate investment management business. It operates out of 350 offices worldwide.