Underlining the robustness of its international real estate program, Kuwait Financial Centre K.P.S.C “Markaz” announced the sale of its industrial property in Stockton, California. The exit, which occurred three quarters prior to underwriting estimate, delivered a net internal rate of return to investors (IRR) of 14.7 percent, exceeding initial estimates.
Launched in January 2019, the investment involved the acquisition and development of a greenfield land parcel into a 419,000 square foot Class A industrial property. The exit is a strong testimony to the resilience of our investment portfolio as the project weathered the economic ramifications of Covid-19 and over-achieved its initial operational and financial goals.
Commenting on the announcement, Sami Shabshab, President of Mar-Gulf Management Inc., Markaz’s U.S. real estate arm, stated: “We are delighted to announce the exit from our industrial property in Stockton and would like to thank our partners for their role in the strong performance delivered even during these uncertain times. The success of the investment further strengthens our strong track record in the US market and confirms the effectiveness of our prudent selection process and best-in-class execution. We remain keen on delivering returns and creating value to our investors by capitalizing on strategic market opportunities. Our investment philosophy remains sector and strategy agnostic under which we identify opportunities based on latest market trends and timing.”
“The sale of the Stockton property is one in a series of exits planned during the course of 2020. We are very proud and pleased that our real estate program continues to deliver on our promise to investors even as the ramifications of the Covid-19 pandemic are felt across the different business sectors. We are actively looking to strengthen our portfolio through strategic investments that are likely to benefit from the consumption and production trends that have either emerged or accelerated due to the pandemic. We are currently assessing several projects in the US and Europe which we expect to launch during the second half of 2020.” Shabshab added.
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 twenty-five 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.