Abraaj Real Estate Fund oversubscribed

The Fund, which was launched in June this year targeting capitalisation of $100 million, was significantly oversubscribed due to large investor response.

Addressing a Press conference here at the Arab Strategy Forum, Shirish Saraf, executive director of Abraaj Capital, said that the closure of the fund before the end of the year is itself an indication of the strong demand the region's real estate market is witnessing. The final closing of the Fund was set for December 31.

Earlier this year, the Fund had acquired significant ownership of Arab Technical Construction Company, which went public in August, the IPO oversubscribing 70 times. Saraf said while ATCC was an important acquisition, the Fund is in the process of bringing in new concepts and instruments in play as it looks at concluding some very exciting deals shortly.

He also described Abraaj's entry into real estate as smooth and a natural progression from being the region's leader in private equity investing.

" With the Middle East's real estate market developing and evolving, there exists an opportunity for institutions to bring asset-backed securitisation and other innovative structures to play. We feel our skills and leadership in private equity buyout are a great advantage as the Real Estate Fund makes new investments and we structure new instruments that have not been used in the region," he said.

Saraf explained that the region's changing legal environment is making a whole lot of difference to real estate investing making such structures as asset-backed securitisation possible. Availability of long-term tenancy contracts and as well as freehold ownerships are key to asset-backed securitisation transactions, he added.

Humayun Shahryar, executive director and head of direct investments at Abraaj Capital, said that the Fund is looking at a range of investment opportunities. Geographically its primary area of focus will be the GCC and the Levant. He also said that the Fund, which has an investment horizon of five years, will be fully invested in the next 24 to 36 months.

He said that the Fund saw interest from a cross section in the region, including institutional and high networth investors.

Shahryar described the decision of Abraaj to announce the closure of the Fund at the Arab Strategy Forum as strategic. He said the Arab Strategy Forum aims to advance the state of the Arab World by bringing together key regional stakeholders engaging them in activities bridging differences and building opportunities for growth and prosperity in the region. The Abraaj Real Estate Fund and such other initiatives happening in the region are proof that the region is in the process of positioning itself, led by centres like Dubai, as a preferred destination for investments.

"The underlying mission of the Forum is to create a new business and economic constellation among the countries of the Arab World. We want to bring our contribution behind this vision of Dubai's leadership and work together in achieving great success and prosperity for our region," he added.