BAHRAIN, 6 June — Gulf Finance House E.C. (GFH), a Bahrain-based investment bank, launched on Saturday a private placement for shares in a new company, which will invest in real estate in the United Kingdom.
Called "Gulf Atlantic Real Estate Company (GAREC)," this investment will be undertaken in cooperation with Knight Frank, one of the major real estate firms worldwide. Knight Frank will act as the company’s strategic real estate consultant.
GFH announced the floatation of 48 million shares of the company at a price of one pound per share for public subscription. The company’s capital will be 50 million pounds out of which GFH will provide 2 million pounds.
GAREC will only operate in the UK. It is expected that the investment will realize an annual cash yield of 10 percent, which will be distributed monthly to shareholders, while the average expected internal rate of return IRR) over the next five years of the investment will exceed 14 percent per annum.
"The steady growth of the UK economy, the robust and strengthening UK real estate market as well as the UK being the most liquid and transparent real estate market in the world, have encouraged the bank to incorporate a company that aims at investing in this particular market," said Essam Yousuf Janahi, CEO, GFH. He further added that on a medium term, the investment suited the bank’s strategy and provided investors rewarding returns on their investments.
Janahi said the UK economy in general witnessed an impressive performance last year, when the gross domestic product (GDP) recorded a growth of 2.4 percent, which is an encouraging indicator for investments in the UK."
"The UK’s real estate sector remains attractive to investors and studies indicate that it is possible to achieve high returns because vacant real estate in the UK bottomed out a long time ago. In addition, demand by tenants for real estate is still positive while local and foreign investors are becoming increasingly interested in UK property, thereby providing a good opportunity for GAREC to strongly make an inroad into this type of investments," he added.
Speaking about GFH’s commitment to invest 2 million pounds in this company, Janahi said: "GFH is serious and confident in the survey studies it conducts for any investment it offers to investors. Therefore it is committed to participate in this project with a certain equity along with the investors who would desire to hold major stakes in the company, particularly when properties in the United Kingdom will be selected carefully to enable investors to achieve high yields and capital appreciation."
GAREC will allocate its investments to include many prime locations in the UK in order to diversify the investment opportunities. It will invest in commercial and industrial properties, and the geographical diversification of the properties in which the company intends to invest will include Central London, M3 and M4 cities like Birmingham, Manchester, Leeds and Glasgow.
