Kuwait’s Global Investment House has made the first acquisition for its $500 million (€352 million) Global GCC Real Estate Fund II.
It has acquired Mashreq Tower in Saudi Arabian capital Riyadh for $30 million, it said. An unnamed domestic conglomerate which is also the main tenant sold the building, it added.
Shailesh Dash, head of alternative investments at Global, said a willing buyer had already come forward offering to pay $42 million for the property. However, he said the offer, which equated to 40 percent more than the fund had paid, was rejected because he expected the capital value of the asset would become “much higher” after leasing the property, rental stabilization, and further value creation.
Global launched Fund II by seeding it with $50 million. The firm is hoping to build a diversified portfolio of opportunistic and value added real estate properties in the GCC region through Sharia compliant structures. Twenty percent of the equity is allocated outside the GCC, however. Target markets include Jordan, Egypt, and North Africa.
Rakesh Patnaik, head of real estate funds, said the vehicle had a “strong pipeline” of transactions in Saudi Arabia, Qatar and the United Arab Emirates.