Geni, AREIT launch Gulf opportunity fund

London-based Geni Capital and Dubai's AREIT Management say the closed ended opportunity fund aims to launch with at least $100 million, with a cornerstone investor already having been lined up.

Geni Capital, the high net worth advisor and fund structuring specialist, has teamed up with AREIT Management, the Dubai manager of the Arabian Real Estate Investment Trust in the UAE, to launch a Gulf states opportunity fund.

The Geni GCC Commercial Real Estate Opportunities fund will target commercial property in the Kingdom of Bahrain, Saudi Arabia, Kuwait, the Sultanate of Oman, Qatar and the United Arab Emirates, according to the firms. The five-year closed ended vehicle will specifically target the acquisition of commercial offices, logistics or distribution centres, warehouses, vehicle parking, and workers accommodation.

In a statement, Geni and its fund manager partner said it was aiming to launch with $100 million of equity, adding that an institutional cornerstone investor had already been secured. It anticipates investors will be high net worth individuals, family offices, funds and institutions from Europe, the Gulf, and Asia.

London-based Geni has teamed up with AREIT because of its operations in the Middle East. AREIT, which is was launched in 2006 and manages the $200 million Arabian Real Estate Investment Trust (AREIT) fund, is majority owned by HSBC Bank Middle East and Daman Asset Management, and operates offices in Dubai, Bahrain and Riyadh. Earlier this year, Chris Purdon joined the firm as chief investment officer from Dubai's Landmark Real Estate Investment Management in anticipation of further fund launches.

Purdon said the fund would focus particularly on the two largest GCC economies; Saudi Arabia, and the United Arab Emirates. “We see a number of compelling reasons to focus time and effort on Saudi Arabia, which offers a particularly compelling demographic. Seventy percent of the population is under 30 years old, [it has] 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,” he said. Saudi Arabia’s oil reserves and the limited inflows of foreign capital have helped protect the country from the worst effects of the credit crisis, he added. Meanwhile, the UAE will benefit from Abu Dhabi’s overhaul of its infrastructure and economy.

Property values in the region are falling, but this will give the fund a chance to take advantage of “increasingly favourable valuations” to acquire a portfolio of regional real estate assets, said Geni. Stephen Williams, Geni's head of sales and business development, said in a statement that the fundamental and economic indicators across the Gulf continued to point to economic growth. “We believe that strong returns can be achieved over the term of the fund.” The Gulf states are expected to deliver continued GDP expansion this year.