“A 1 billion Egyptian pounds company was launched two weeks ago after getting the approval from Egypt,” said Bader Al-Ajeel, executive director of the general reserve sector at KIA.

“This firm will act as KIA’s investment arm in Egypt... Current Kuwaiti investments there (in Egypt) might be put under this firm’s umbrella in the future,” he said.

Kuwaiti investments in Egypt account for about $15 billion, according to latest data, Egyptian Ambassador to Kuwait Taher Farahat said last month.

Separately, another KIA official said the sovereign fund expects minimum returns of six percent from a five-year real estate portfolio that will invest in the local market.

“The returns could vary according to market conditions... the minimum returns expected over five years is six percent,” said Khaled Al-Hassoun, real estate manager at KIA.

Earlier this month, KIA said it would invest 1 billion dinars ($3.62 billion) in the local commercial property market, in a liquidity boost to the sector that may help lift plunging prices.

Kuwait Finance House said it would manage 250 million dinars of the fund.

Kuwaiti real estate sales of commercial and investment property, excluding residential, more than doubled in 2010 compared with 2009, according to official data.