Al Rajhi Capital will serve as fund manager for the fund. Deal sourcing and execution capability will be provided to the fund manager by a newly-formed real estate advisor, jointly owned by Arcapita and Al Rajhi Capital. The real estate advisor will be staffed with senior real-estate professionals from both Arcapita Bank and Al Rajhi Capital.
This Fund represents the first collaboration in private equity between Al Rajhi Capital and Arcapita and the two companies will seed the fund with a joint investment of SR187m. They will combine their resources and expertise to source and acquire investments for the fund in high-quality, income-generating real estate assets, in the Kingdom of Saudi Arabia and other countries of the GCC. The focus will be towards logistics warehouses, as well as healthcare and education related assets.
Jorge Cantonnet, MD and head of private equity at Al Rajhi Capital, said: “As the economic downturn shows signs of bottoming out, we are beginning to see good opportunities for investors with available capital for investment. We believe that this fund is launching at a time that will allow us to deploy our financial resources to gather a portfolio of prime real estate assets at attractive valuations. Our partnership with Arcapita creates a powerful execution capability to leverage these investment opportunities, both in Saudi Arabia, and the rest of the GCC. Early responses from investors have been very positive.”
Hisham Al Raee, ED of investment placement at Arcapita, said: “We have worked closely with investors in developing the fund mandate. Investors are exhibiting good appetite for high-quality yielding investments within the GCC, and in particular in Saudi Arabia, where economic growth has remained strongly positive throughout the economic downturn. Economists predict that over the next decade, GCC growth will outpace global growth, and this income fund offers diversified exposure to the regional growth story.”
Nael Mustafa, head of Arcapita’s Middle East real estate group, said: “The acquisition of Azizia Panda’s distribution centre in Riyadh is an outstanding start for the fund and a clear demonstration of the quality of assets becoming available. It’s an excellently located and fully modernized facility, and benefits further from an 18-year lease agreement with a solid, blue-chip tenant. We believe that our partnership with Al Rajhi Capital will be advantageous as we identify and acquire similarly attractive sites across the GCC.”
