Global successfully completes the private placement of Kuwait Business Town Holding Company

The paid-up capital has been increased from KD1.05 million to KD52 million. Global has opened the offering for a very limited time and for only existing clients of Global.

Mr. Omar El Quqa, Executive Vice President at Global, has announced that Kuwait Business Town Holding Company KSC has been well received in the Kuwaiti and Gulf markets. As soon as the offering had commenced, immense volume of applications had been submitted by institutions and personal accounts. Due to this strong demand, the offering has been oversubscribed several times and shares have been allocated to applicants. As soon as the allocations have been completed, some investors have indicated their interest to purchase additional stakes from other investors in the company. The most recent trading price has been around 125 Fils, which translates into 18% over the offering price.

Mr. El Quqa has attributed this demand and increase in share price to several reasons; most importantly, the project location and the discounted price at which the land has been acquired. Kuwait Business Town Holding Company KSC has obtained the land price at KD3,250 per sqm, while neighboring plots have been acquired at KD4,000-5,000 per sqm. As a result, the company can show capital gains in the first year of operations. The company will benefit from realizing additional capital gain revenues in the first few years from the sale of land plots and offices, and continue to obtain sustainable revenues from leasing additional offices, a convention center, and retail spaces. This structure will improve shareholders' long-term rate of return on their investment.

Al-Mazaya Holding Company, a Kuwaiti shareholding holding company working in the field of real estate development in and outside of Kuwait, will manage Kuwait Business Town Company for the first three years, the latter will be recruiting its own management team to take over management from Al-Mazaya, after the elapse of a 3-year period.

The main architectural designs of Kuwait Business Town have been prepared by Gensler Architecture, Design and Planning International, and are currently in the final stages of the detailed layout. The space allocated to office buildings will be divided into different plots ranging from 100 sqm to 1000 sqm, to cater to the needs of small, medium and large companies.

Kuwait Business Town will lease 60% of the total space available for office buildings and the balance of 40% will be offered to potential tenants on a freehold basis through direct selling. There will also be separate multi-storey parking lots, as well as parking spaces for each individual office building, bringing total parking area to around 70.4 thousand sqm to accommodate all prospective tenants and their clients, in addition to visitors of the commercial outlets. Different schemes for leasing/selling will be offered to cater for the diversity of clients' needs coupled with a range of financing schemes through conventional or Islamic methods.