Dubai-based investment bank, Rasmala Investment Bank, is aiming to raise $100 million in equity for investment in Saudi Arabia real estate.
According to Middle East news source, Emirates Business, Rasmala will open the fund, which would specifically target middle-income residential development, to investors across the GCC and will require individual commitments of approximately 10 percent of the fund’s total capital.
Global property services firm, Jones Lang LaSalle (JLL), said in a recent investor sentiment report that investors expect a 10 percent gain in Saudi Arabia’s real estate market over the next 12 months, far exceeding expectations in other Middle East markets.
The firm said investor confidence in Saudi real estate market performance was partly down to government efforts to stabilise its economy. One recent move by the government was to permit overseas ownership of real estate assets in the country where previously this was prohibited. JLL also reported that yields hard already begun to harden with some investment grade assets trading at initial yields of below 10 percent.
“While investor respondents expect yields of 12%+, there has been seen some yield compression over the last year, and the limited supply of investment grade assets have traded on initial yields of below 10%. However, there are more buyers than sellers of investable assets in the Kingdom so demand remains high,” the firm said.
Other firms seeking to raise capital for investment vehicles targeting Saudi Arabia include Shuaa Capital and Arcapita which is teaming up with Al Rajhi Capital, the investment banking subsidiary of Saudi bank, Al Rajhi Bank.