Delivering on its promise towards creating sustainable wealth for its clients, Kuwait Financial Centre K.P.S.C “Markaz” has successfully exited a commercial real estate investment in the U.S. The company sold an industrial project in Phoenix, Arizona, achieving a net internal rate of return (IRR) of 17.44%for its investors, exceeding initial estimates.
The exit is in line with the initial business plan of the investment which involves the acquisition and development of a 15.91 acre site into two industrial buildings with a total area of 224,471 sq. ft. and the sale of the properties once they are leased.
Commenting on the announcement, Sami Shabshab, President of Mar-Gulf Management Inc., Markaz’s U.S. real estate arm, stated: “We are delighted to have successfully executed the sale of our industrial project despite prevailing uncertain macroeconomic challenges triggered by the COVID-19 pandemic. The transaction is a strong testimony to the resilience of our investment portfolio and further strengthens our strong track record in the US market. I would like to thank our partners for their excellent execution and ability to deliver throughout the unusual circumstances we witnessed this year.
Shabshab added: “We are extremely pleased with the performance of our portfolio this year having achieved 5 exits including the current transaction. The exits resulted in healthy returns and occurred across both our industrial and multifamily investments. The current market conditions will provide intriguing strategic opportunities in existing and new markets across the US, which we are ready to capture.”
For his part, Abdullatif W. Al-Nusif, Executive Vice President of Wealth Management and Business Development, Markaz, commented: “Our international real estate program has and continues to deliver consistent performance both in the USA and Europe. As a result, the program has witnessed a growth in assets under management driven by increased demand from our investors. We remain focused on expanding our portfolio in existing and new markets across the US and Europe, as well as capturing the unique opportunities that the coronavirus pandemic presents by building strategic partnerships with leading institutions in both markets.”
Markaz has been active in the US real estate market since 1977 with the launching of its first syndicated transaction. Since 1988, Markaz has been conducting real estate transactions in the US through Mar-Gulf, the US real estate arm and wholly-owned subsidiary of Markaz. Over the past thirty years, Markaz and Mar-Gulf have been involved in the ownership and development of real estate properties in a variety of segments including industrial, retail, multifamily and office across the U.S. with a total acquisition cost exceeding USD 1.65 billion.