KUWAIT, 18 September 2007 — Global Investment House (Global), a leading investment bank and asset management company, announced yesterday that Global Asia Real Estate fund has concluded its first real estate acquisition in the People’s Republic of China, as part of the fund’s investment strategy.
Sameer A. Al-Gharaballi, executive vice president at Global — acting as fund manager — said the fund finalized the purchase of a distressed shopping mall in a prime location in the city center of Weifang, Shangdong Province, China.
The Fund conducted the investment with two joint venture partners, Titan Capital, a Singapore-based private equity firm and Pan China, a commercial real estate group in China. The total value of investment is $8.8 million.
The retail sector in China has been one of the best performing sectors over the past few years. The Fund, along with its partners, intend to reposition the mall as a new generation mall catering to the needs of the youth. Currently, there are no malls in Weifang targeting the youth population. The mall is located in a prime commercial area with well-developed surroundings and more than one access road leading to the site.
Weifang’s GDP has grown steadily over the last five years at CAGR 18 percent. With the Olympic sailing competition taking place in neighboring Qingdao, Weifang is set to enjoy spillover economic benefits from being located between Beijing and Qingdao.
According to Cushman & Wakefield Capital Asia, the Fund’s advisor, this investment can be expected to provide gross returns in excess of 25 percent.
He added that the exit strategy from this investment is by way of selling the shares of the company that was formed for this project or by way of sales proceeds of an en bloc sale of the project.