$500 million Gulf property income fund gets launched

Al Rajhi Capital, known as the foremost investment arm of Saudi Arabia’s Al Rajhi Bank 1120.SE and Bahrain’s Arcapita Bank has brought to the fore a $500 million Gulf property income fund and the first and foremost intention is to take advantage of diminishing prices. It has also come to the knowledge that the two companies will sow a mutual investment of $50 million for the fund. In accordance with their joint statement, the same will concentrate on logistics warehouses, healthcare and education-related assets in Saudi Arabia and the Gulf Arab region.

Is this anything new? Not in any way as lots of reports do suggest that Saudi Arabia has earmarked in the region of $400 billion so as to improve infrastructure over the next five years. Kingdom of Saudi Arabia is also looking to provide for mounting demand for new housing from the young population in the world’s largest oil exporter. It has to be mentioned that both Al Rajhi and Arcapita have completed the first attainment for the fund and paid money for a logistics and distribution centre in the kingdom’s capital, Riyadh, for $79.7 million.

Speaking on this, Jorge Cantonnet, Managing Director and Head of Private Equity at Al Rajhi Capital, stated, “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.” Have down pat that the logistics facility happens to be the foremost distribution hub for Azizia Panda United Company, leading supermarket firm in the kingdom, and will be leased back to Azizia over 18 years.

Is the market regenerating then? It seems so and it is good without a shred of doubt. It is undeniable that the entire region was worst affected by the economic downturn.