JEDDAH, 5 January 2005 -- Global Investment House (Global) has announced the completion of the private placement for increasing the capital of Kuwait Business Town Holding Company KSC. The paid-up capital has been raised from KD1.05 million to KD52 million. Global has opened the offering for a very limited time and for only its existing clients.
Omar El Quqa, executive vice president at Global, announced that Kuwait Business Town Holding Company was well received in the Kuwaiti and Gulf markets. As soon as the offering commenced, immense volume of applications was 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. Soon after the allocations were completed, some investors 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 percent over the offering price.
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 land has been acquired.
Kuwait Business Town Holding Company obtained land at KD3,250 per square meter, while neighboring plots were acquired at KD4,000-5,000 per square meter. 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 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 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 after the 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. The space allocated to office buildings will be divided into different plots ranging from 100 square meters to 1,000 square meters, to cater for the needs of small, medium and large companies. Kuwait Business Town will lease 60 percent of the total space available for office buildings and the balance will be offered to potential tenants on a freehold basis through direct selling.
There will also be separate multistory parking lots, as well as parking spaces for each individual office building to accommodate all prospective tenants and their clients, in addition to visitors of the commercial outlets.
Khalil Hanware, Arab News
© Arab News 2005
