Dubai Group becomes founding shareholder in Mazaya Saudi with 20% stake

The transaction was completed through its subsidiary Dubai Capital Group, which has invested approximately Dhs500m ($135m) in the Saudi company's equity.

As a founding shareholder, Dubai Capital Group will play an important role in the development of the company and will be represented on its Board of Directors.

Soud Ba'alawy, Executive Chairman, Dubai Group, said:

"As the leading diversified financial services company of Dubai Holding, Dubai Group attaches paramount importance to diversifying, not only geographically, but also into multiple and profitable business sectors. This transaction is in line with our long term strategic plans as we believe Mazaya Saudi is ideally positioned to become a leader in the booming Saudi real estate sector. We are also pleased to have forged an association with Al Mazaya Holding, one of the most dynamic and visionary institutions in the GCC's real estate landscape."

Mustafa Farid Geninah, CEO of Dubai Capital Group, said: "This transaction demonstrates our confidence in the Saudi real estate sector where, it is estimated, that the long term demand for housing units is 1.3 million units up until 2015. Further market statistics indicate that only 45% of Saudi families own houses, which means that in the long run there are real growth opportunities in this important sector.

"This investment will also contribute to strengthening our regional private equity portfolio, which has achieved superior returns in sectors such as fertilizer production, cement, glass, aviation and real estate development. This deal is further testament to the Group's remarkable performance, achieving an Internal Rate of Return of 106% over the last five years."

Headquartered in Riyadh, Mazaya Saudi will invest in attractive opportunities in the Kingdom's real estate sector, targeting the middle and high end market in the residential, commercial and office segments.

Mazaya Saudi will have a paid up capital of Dhs2.45 bn ($667 m). It will be managed by Al Mazaya Holding KSCC, the prominent regional real estate developer headquartered in Kuwait, which has accomplished several prestigious projects across Dubai, Abu Dhabi, Bahrain, Qatar and Oman.

Engr. Khalid Esbaitah, Managing Director and Chief Executive Officer of Al Mazaya Holding stated: "We are happy with the strategic alliance between Al Mazaya Holding and Dubai Capital Group. The Mazaya Saudi has ambitious expansion plans across Saudi real estate market and the company's primary objective is to invest in the Kingdom's real estate sector, and to contribute in developing the real estate assets."

By focusing on strategic investments in public equity, greenfields, growth capital and leveraged buy-outs, Dubai Capital Group has become a leading investor in Middle East and North Africa, with one of the strongest track records in the region.