Ellington Capital, a real estate asset and fund management firm based in Dubai, is planning to launch the first real estate fund in the Middle East to offer investors access to developer project returns.
The Ellington Opportunities Fund I will limit risks by building on its track record of corporate governance and execution, both in the region and globally, the company said in a statement.
The company has appointed Simon Townsend to champion the roll out and the growth of the firm in the region and beyond. Townsend has previously worked with CBRE’s Middle East business as well as investment and Islamic investment banks in the Middle East.
“The intention of the fund is to create value through development. We will be entering the market to acquire land on an arm’s length basis to develop bespoke, build to rent properties leveraging off the design and development expertise of Ellington Properties,” Simon Townsend, CEO of Ellington Capital told Zawya.
Real Estate Investement Trusts (REITs) are the most common form of property funds in the UAE. It can either be a public or a private fund.
ENBD Reit, the Shariah-compliant real estate investment trust managed by Emirates NBD Asset Management, announced that its net asset value (NAV) as at September 30 was at $198 million ($0.79 per share), decreasing from $230 million from the six-month period ended March 31, mainly due to valuation pressure.
“Traditional funds in the market have a strong underlying requirement on existing income assets, however, the differentiating dynamic of our initial fund will be to provide investors a development that is backed with returns," Townsend said.
“Dubai will be our first target market and we are already in discussions to add more markets within the GCC. The key to determining the next market will be both investor sentiment and the market characteristics that will drive investment value,” he said.
According to the statement, Ellington Capital is building in-house capabilities to offer the full spectrum of fund management services.
Among key targets is to design and build high quality apartments targeting multi-family rental markets in key markets, which will deliver assured returns for investors, it said.
Robert Booth, Executive Chairman, Ellington Capital, said: “The launch of Ellington Capital follows a thorough evaluation of the market potential for property investments in the region where we identified an industry ‘white space’ to offer tangible value propositions for investors. Through diligent fund management and strong property development and management expertise, Ellington Capital will deliver focused returns for investors."
(Reporting by Seban Scaria; editing by Daniel Luiz)
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