Kuwait sovereign fund eyes $3.6bn real estate portfolio

The Kuwait Investment Authority is reportedly launching a fund targeting local real estate markets.

Kuwait Investment Authority is set to launch a $3.6 billion real estate portfolio targeting local markets, according to media reports.

The Kuwaiti sovereign wealth fund said the portfolio would target “good returns [in the] mid-term and long-term” following a steep drop in property valuations across the Middle East, according to a statement on the state news agency Kuna and cited by Reuters.

The portfolio, valued at around 1 billion dinar (€2.6 billion; $3.6 billion), will not target residential properties and will initially be managed by Islamic lender Kuwait Finance House, the reports said. Kuwait Investment Authority (KIA) was unavailable for comment at press time.

In December, St Martins, the UK real estate investment arm of KIA, agreed to sell a £250 million portfolio to London-listed REIT, Hammerson. The sale by St Martins was part of a wider strategy overhaul to target more direct acquisitions on large trophy assets and away from investing across a wide array of sectors and locations in the UK. The firm is reportedly planning to sell approximately £900 million of assets in total, according to the Financial Times.

KIA is the world’s fifth largest sovereign wealth fund with estimated assets under management of more than $200 billion. It purchased St Martins in 1974.