Markaz Real Estate Fund: Highest Performing Fund in its class


Kuwait Financial Centre “Markaz”, one of the Middle East’s leading investment banking and asset management companies, announced that Markaz Real Estate Fund, an income generating and Shari'ah Compliant Fund which invests in real estate properties within the state of Kuwait, has outperformed comparable funds. Bassam Al-Othman, Senior Vice President – Real Estate, said "MREF was established in 2002, and generated 17% Year-to-Date as of end of September, 13.6% per annum since inception (CAGR), and stable monthly cash returns of 6.6% (per annum) making it the highest performing fund in its class.” Al-Othman added, “Based on the Fund’s success and on our belief that income-producing properties continue to offer a unique opportunity to generate attractive returns, we extended the life of the fund for an additional five year term. Additionally, the Fund's strategy and asset allocation has been modified allowing the fund to benefit from emerging opportunities with a low risk approach. Additionally, the fund is listed in the Kuwait Stock Exchange for added liquidity." The real estate market landscape has changed and has presented new opportunities that are driven by the strong economic & demographic fundamentals including Kuwait population growth at unanticipated rates, a CAGR of 7.1% since 2003; Higher oil prices fostering growth, Kuwait Export crude increased from $ 25 per barrel to over $ 80; Upcoming mega projects: US$ 232 billion of new projects to be executed over the next 5 years; Emergence of outer city areas offering higher potential for growth at attractive valuations; Compression of cap rates due to aggressive investor activity. The Fund's new strategy was formulized to take advantage of the above fundamentals and the opportunities presented; it consists of more active investment management to generate higher returns with compressing cap rates; Increased allocation to trading and opportunistic activities to generate higher returns; Increased diversification of asset classes including retail, office & industrial properties; and Increased allocation to outer city areas. Markaz currently manages four real estate funds with over USD 600 million in assets, encompassing warehouses, office buildings, retail centers and apartment buildings. Its real estate track record goes back to 1978, with the launching of its first syndicated transaction in the US. 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. In 1998, Markaz Local & MENA Real estate department was established. In December 2003 Markaz established Amar Finance & Leasing, a real estate mortgage finance company. Kuwait Financial Centre S.A.K. 'Markaz', with total assets under management of over KD1.40 billion as of June 30, 2006, was established in 1974 has become one of the leading asset management and investment banking institutions in the Arabian Gulf Region. Markaz was listed on the Kuwait Stock Exchange (KSE) in 1997; and was recently awarded a BBB+ corporate rating by Capital Intelligence Ltd. -Ends- Photo Caption: Bassam Al-Othman, Senior Vice President – Real Estate of Kuwait Financial Centre “Markaz”