Abu Dhabi, February 22, 2005: The National Investor yesterday announced its Emirates Real Estate Fund has acquired the future cash flows of 27 Abu Dhabi residential properties developed by Al Ahmadain General Contracting Co. LLC (AAGCC). The Shari’a-compliant transaction, which is worth AED 19 million, represents the Fund’s second major investment in the burgeoning Abu Dhabi real estate market.
The Fund was the first of its kind to be approved by the UAE Central Bank when it was launched in 2003 and its current size stands at AED 114 million, with major GCC institutions among its unitholders. With this latest transaction, the Fund’s portfolio now stands at 63 prime properties throughout Abu Dhabi with gross yields in excess of 10%.
Commenting on the deal, Dr Karim El Solh, CEO of The National Investor, said: “The National Investor decided to securitize the future cash flows generated by the properties in the portfolio of AAGCC because of the excellent quality of the design and construction as well as the high quality of the tenants, thus ensuring a steady and predictable rental income for the Fund’s unitholders. “AAGCC has the best Istithmar track record and the largest and highest-quality portfolio of properties in Abu Dhabi. The portfolio of properties we have acquired will generate sizable and high-quality income for the Emirates Real Estate Fund. “Rather than waiting several years to recover its investment from the rental income of the properties during the Istithmar period, AAGCC obtains an upfront payment through an Ijara lease equivalent to the property’s future projected cash flows. In essence, the Fund is monetizing the developer’s future cash flows,” said Dr. El Solh.
“This is our second transaction with The National Investor and the Emirates Real Estate Fund and we look forward to even further cooperation in the near future”, said Mr. Sultan Alotaiba, Chairman of AAGCC. Outlining the benefits for the company, Mr. Abdulla Gadalla, General Manager of AAGCC, said: “The upfront payment gives us an immediate profit realization and allows us to recycle our capital into other developments, allowing us to continue growing.”
Issued on behalf of The National Investor by Hill & Knowlton.
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Notes to Editors:
About the National Investor: The National Investor (TNI) is a leading UAE investment and advisory firm with a distinguished track record in fundraising, advisory services, asset management, and private equity investments. The Company is backed by over 65 UAE shareholders who come from the highest echelons of the business and political community. TNI is actively involved in investment banking, private equity, and asset management and is currently ranked as the leading arranger of public share offerings, having lead managed the largest number of public offerings in the UAE to date. For more information, please visit www.nationalinvestor.ae.
About the Emirates Real Estate Fund: Launched and managed by The National Investor since 2003, the Emirates Real Estate Fund invests in income-producing properties in the UAE to achieve above-average returns at below-market risk. The Fund’s Shari’a-compliant structure and low-risk profile has proved appealing to investors seeking steady returns and a respectable current income in the prevailing low-interest-rate environment. The Fund’s structure allows investors to receive the returns derived from real estate properties without the risks and obligations of individual property ownership. The Fund’s strategic real estate advisor is Colliers International, one of the largest real estate management firms in the world with over 200 offices in 52 countries worldwide and over US$40 billion in properties under management.