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UAE real estate fund launched

AED 100 million Emirates Real Estate Fund to invest in prime locations in the UAE and in other emerging Middle Eastern centres.

The National Investor, in association with Colliers International Property Consultants, has launched what it claims to be the first Central Bank approved UAE real estate investment fund. The Dhs100 million Emirates Real Estate Fund has been created to invest in prime locations in the UAE and to selectively invest in other emerging Middle East centres.

‘We have spent several months analyzing the property market and in the current economic cycle, we feel the market fundamentals and timing are ideal to launch our fund,” says Dr. El Solh Al Solh, CEO of the National Investor. “At a time when the US Fed cut rates in November to 1.25%, the lowest since 1961, real estate yields in general and in the UAE in particular, look especially attractive."

The fund managers aim to capitalise on the recent flurry of activity in a sector that now accounts for around 18% of the UAE’s GDP. According to the National Investor, Dubai alone saw over Dhs3.25 billion of real estate sales in 2001.

“Property is increasingly being re-evaluated as a new asset class among institutional investors who seek preservation of capital and income streams as well as value enhancement,” says Dr. El Solh. “On an international level, real estate funds have been among some of the best performing funds this year and have been something of a haven for investors at a time when equity markets have been in negative territory.”

At the same time, there has been talk of excess capacity in the market, but the company argues that yield levels remain attractive in more popular locations. A market study by Colliers’ says that the All Yields Property Index has hardened to a range of around 7-9% on average in Dubai and around 9-12% in Sharjah.

The National Investor, a UAE investment banking and VC company, will be the fund manager. Colliers International, a major global real estate consultancy, will act as strategic real estate advisor to the Fund. Investments will mostly be through private placements.

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