Jun 06 2012
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Abu Dhabi's Gulf Capital To Invest AED1 Billion In Riyadh Housing
Wednesday, Jun 06, 2012
(This story was originally published Tuesday.)
ISTANBUL (Zawya Dow Jones)-- Gulf Capital , an Abu Dhabi-based investment and private equity firm, is set to plow 1 billion U.A.E. dirhams ($272 million) into a new residential compound in Riyadh through its real estate arm as it eyes other deals in Saudi Arabia, Egypt and the United Arab Emirates.
"We're investing AED1 billion in Saudi Arabia residential housing," Karim El Solh, Gulf Capital 's chief executive, said Tuesday on the sidelines of the World Economic Forum in Istanbul. "We're building one of the largest residential compounds in Riyadh through our real estate arm. The population in Saudi is growing tremendously fast, and there's a shortage of 1.3 million housing units. It will be an income-producing, cash-regenerating residential compound."
"If you look at the residential compounds in Riyadh, the waiting period at compounds and housing units is one to two years," El Solh said.
Housing has been a major priority in government spending plans. Amid the Arab Spring uprisings last year, Saudi Arabia's King Abdullah announced 40 billion Saudi riyals ($10.67 billion) in additional spending on housing that February. Last March, the king ordered the construction of 500,000 more houses for Saudis at a cost of 250 billion riyals.
As Gulf Capital makes inroads in Saudi real estate, it is also looking at further acquisitions this year through its $533 million GC Equity Partners II private equity fund.
The company has closed two buyouts so far this year, purchasing 82.7% of the U.A.E.-based temporary energy provider Sakr Energy Solutions in January and 80% of human resources firm Reach Group the following month.
El Solh said the fund is now looking at two more purchases in health care and oil and gas. The fund is more than 50% deployed and should be three-quarters invested by the end of the year, he said. "We're in the process of looking at a health-care deal and an oil and gas deal, which we should announce in the next quarter," he said. "This year we're on track to close not three but maybe four deals."
One of the new deals may be in Egypt, which Gulf Capital sees as a solid long-term play despite the political uncertainty there. Egypt, the U.A.E. and Saudi Arabia were focal points for Gulf Capital investments, El Solh said.
"We're finding now very attractive deals at lower valuations where we are able to acquire control of them, something you wouldn't see in 2007 and 2008," he said. "It's a good opportune time to be hunting for deals in Egypt."
Write to Asa Fitch at email@example.com
(END) Dow Jones Newswires
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