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GIH launches $500m Gulf fund

Kuwait-based Global Investment House has launched its second Shariah-compliant real estate fund targeting property investments in the Middle East.

Global Investment House has launched Global GCC Real Estate Fund II, a $500 million (€318 million) vehicle focused on investments in the Gulf Cooperation Council (GCC) region. The fund is the Kuwait-based investment firm’s second property vehicle targeting the GCC region.

Omar El-Quqa, GIH executive vice president, said in a statement that market conditions were solid for the launch of its second fund. An appreciation in oil prices, reform initiatives by GCC – a trade bloc comprising the six Arab states of the Persian Gulf – governments, increased cross-border trade and foreign investments have all set the stage for growing investments in the region, he said.

Global GCC Real Estate Fund II will invest in all GCC countries with a focus on the United Arab Emirates, Saudi Arabia and Qatar. The Shariah-compliant fund will invest in opportunistic and value-added assets across property sectors. It will also target investments in land parcels, distressed properties, assets nearing completion, investment in equities of listed real estate companies as well as pre-IPO opportunities.

The growth of real estate in the GCC countries was “ever expanding,” according to the firm. Rental yields continue to be in excess of eight percent compared to three to six percent in more mature markets such as in Europe and Asia. Rakesh Patnaik, GIH vice president and head for real estate funds, said Global GCC Real Estate Fund II had already identified a “healthy pipeline” of opportunities in the GCC region.

The fund expects to generate a gross return of around 25 percent.