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PERE Dubai: desert brainstorming

From Shariah-compliant debt to how to strategically partner with capital for African investments, PERE presents four insights from December’s Middle East forum.

Steps away from the world’s tallest building and the most profitable mall, delegates and speakers at PERE Investor Forum: Dubai shared equally ambitious strategies to raise capital and invest it globally.

Here, PERE presents four takeaways from the conference’s sessions and from informal conversations:

 

  1. Growing interest in Shariah-compliant debt: Multiple speakers highlighted desires to invest in debt globally. Rachid Ouaïch, regional manager at investment advisory firm Wafra Capital Partners, said the additional consideration of Shariah compliance reduces the investable universe, but his clients are keen to access the investment strategy. Nasser Al-Khaled, global head of real estate for Kuwait-based intermediary Global Investment House, said his firm is planning to execute its first Shariah-compliant debt investment next year.
  2. Western investors are starting to access Middle Eastern deals: Knight Frank’s Joseph Morris said Western capital sources analyzed the Middle Eastern markets before the global financial crisis but made few investments. Now, institutional investors are back, “accessing, if not executing, deals.” They are looking for critical mass through building a local or regional portfolio, however, he said. “What’s the point of having one $100 million building?” Morris said investors ask. However, another panelist cautioned that geopolitical turmoil in Saudi Arabia and Qatar may cause Westerners to reconsider the region.
  3. Headaches, but also opportunities, in India: Brookfield’s regional head Anuj Ranjan shared a conversation with another investor, in which the man joked that India stood for “I’ll Never Do It Again,” with the region comprising 5 percent of the firm’s assets under management, but 50 percent of its headaches. However, Ranjan highlighted significant opportunities to develop the country’s residential markets. Comparing office with other geographies, he noted that all of India’s space in that type was still less than Manhattan’s square footage. Being both patient and hands-on is a must in the growth market, Ranjan said.
  4. Africa real estate can work, under the right conditions: “This is a continent that
    Keynote speaker Bronywn Corbett

    needs to be looked at,” keynote speaker Bronwyn Corbett, chief executive of Grit Real Estate Income Group, said, pointing out opportunities in needs-based real estate, such as retail and logistics, not in luxury developments more prone to volatile demand swings. Another Grit executive said partnering with local pensions – the source for 40 percent of the firm’s capital – mitigates on-the-ground risk through local buy-in.