Hines to launch $1bn UAE distressed fund

According to reports in the local media, the Houston-based developer and fund manager is aiming to start investing through the vehicle in the next six to nine months.

Houston-based Hines is planning to launch a $1 billion real estate fund aimed at taking advantage of distressed situations in the United Arab Emirates.

According to a report by the Gulf Daily News, the firm aims to tap the investor market for between $50 million and $250 million each and supplement this with leverage, in order to invest in up to 12 large investments.

Jurgen Herre, head of Middle East and north Africa at Hines, which controls approximately $25.8 billion of assets worldwide, said: “For the last two years we did not invest because we felt there would be a price correction. But in six to nine months, we will start investing equity into projects with our institutional partners. There are major opportunities now.”

Hines, which has operations in Abu Dhabi, will be hoping to take advantage of a regional market which has fallen victim to development saturation, a lack of liquidity and unsustainable borrowing by market participants. This has led to a number of projects to be shelved, some mid-development, particularly in Dubai.

Last week, property services firm Jones Lang LaSalle released its Real Estate Investor Sentiment Survey in which it said within the MENA region, the United Arab Emirates, alongside Saudi Arabia and Qatar, would have the strongest performing real estate markets over the next 12-24 months.

“Cushioned by their oil (and gas) wealth, these markets have demonstrated their internal resilience to the global economic crisis and though their real estate markets have been impacted, they are believed to have the resources to overcome these challenges,” the report said.