Dubai: National Bank of Abu Dhabi (NBAD) unveiled plans yesterday to launch a fund focusing on the UAE's property market with a fundraising target of around Dh1 billion.
NBAD, the UAE's second largest lender by assets, also launched a new investment management arm based in the Dubai Financial Centre (DIFC).
Senior officials outlined their proposals to take the real estate fund public via an initial public offering (IPO) within the next two years, creating the region's first listed real estate investment trust (REIT) in the process. NBAD and its partner in the fund venture, Gulf Investment Corporation, are each contributing Dh50 million in seed money to the fund, which officials hope will deliver double digit annual returns.
Mahmoud Al Aradi, the senior general manager of NBAD's financial markets division and a director of the DIFC subsidiary, said the fund would target seven to 12 properties.
Game changer
"This is a game changer for the real estate market in the UAE," Al Aradi said.
"We believe the market has turned a corner and [it] is offering great opportunities," he added.
The fund, which will be regulated in the DIFC, is expected to launch in the coming few weeks and will focus on commercial offices, warehousing and industrial properties in the UAE, initially in free zones.
Al Aradi said there was "no political motive" to NBAD's decision to launch the product in Dubai as opposed to the capital Abu Dhabi.
"Abu Dhabi and Dubai operate a model whereby they both complement each other. Dubai already has the legal infrastructure through DIFC but if Abu Dhabi had something similar we would do the same there. There is no political motive," he said.
Consultancy Knight Frank and NBAD-owned property manager Abu Dhabi National Properties are to work with the fund and provide advisory and management services.
Core areas
"We are looking at the cream at the top end of the market and have already identified a number of different properties," said Joseph Morris, director of investments at Knight Frank.
"In particular, we are focusing on core areas that have proven popular with multinational companies such as DIFC, Emaar Square, Jebel Ali Free Zone Area and Tecom," he added.
