Dec 10 2006
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Bahrain: TAIB sets up $500m unit to invest in property
The new company, ACACIA Real Estate Limited plans to invest between $4 billion and $5 billion in the medium term and will start with an initial paid-up capital of $150 million, and TAIB, as Principal Founding Shareholder, will invest 10 per cent of this equity. The balance of the initial capital has been raised from a select group of founding shareholders who include GCC-based institutions and individuals, as well as TAIB's existing real estate partners from the US and Europe. The operations of the company will begin by year-end.
Iqbal G. Mamdani, Vice-Chairman and Chief Executive Officer, TAIB Bank , said: " ACACIA was founded on both the principles and practice of TAIB's real estate investment portfolio development over the past 20 years.
"Our extensive and successful experience in real estate investments provides the right platform for this strategic initiative.
"It's also the right time, as India, Turkey and the countries of the GCC in particular offer innumerable investment opportunities in the real estate sector."
Since 1993, TAIB has undertaken real estate transactions in excess of $4 billion.
In the last five years, it has generated average investment returns in excess of 16 per cent per annum for its clients, whereas its own average investments returns have been in excess of 30 per cent per annum.
These returns were achieved by investing in income producing properties, together with the synergistic alignment of strategic partners worldwide.
ACACIA , like TAIB, will diversify investments geographically, specifically in Europe, the US, India, Turkey and the GCC countries.
It will also diversify across real estate asset classes, including office, retail, residential, industrial and leisure.
ACACIA will operate independently with its own Board of Directors and management team.
But it will have an arrangement with TAIB under which TAIB will have the exclusive right to distribute its investment products.
This arrangement will enable the company to focus on deal flow while leveraging the bank's placement capability. It is anticipated that ACACIA will initially invest up to 70 per cent in income-producing properties and 30 per cent in development projects, with a total value of $4 to 5 billion in the medium term.
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