10 August 2016
Rasameel Investment House (RIH LLC), A regulated company under the supervision of the Dubai Financial Services Authority (DFSA), has announced a 24 million USD Sharia-compliant real estate acquisition of labor accommodation in Dubai, United Arab Emirates.
The acquired property, which spans an area of six thousand square meters, is located in Muhaisnah, which is the only area in northern Dubai that provides accommodation to laborers. The property is comprised of four buildings, in addition to a restaurant and supermarket, and includes 540 rooms that are all leased through a renewable three-year contract.
Commenting on the acquisition, RIH General Manager Rashed Al Rashed, announced that the deal will yield an annual cash return up to 12 percent, to be distributed monthly with an average expected ( IRR ) of 14 percent upon sale. RIH is the investment arm of Rasameel Structured Finance Company.
Al Rashed continued, "We are pleased with the success of this deal, which attracted us to the revival of the Dubai real estate market, and the increased demand on labor accommodations". This increased demand, he explained, "is primarily due to the continued property development in Dubai, particularly after having been awarded the opportunity to host Expo 2020."
"Real estate projects that have been completed in Muhaisnah have reached a very high rate of approximately 95 percent of available space , which indicates that the probability of building new labor accommodation in the future is very limited. This will lead to an increase of prices, based on heightened demand and limited supply," Al Rashed stated.
He explained, "Investor trust in the Dubai economy is gaining traction due to the continued revival of the emirate, which has encouraged investors to enter the real estate market with the hope of securing high returns." This has, in turn, led to an increase in value of acquired real estate and high profit returns upon exit, which will be easier due to these factors, Al Rashed added.
Concluding, Al Rashed highlighted that the company is seeking to expand its operations in the region, as part of its investment strategy, focusing primarily on catering to the needs and demands of its current and future clients.
© Press Release 2016