The Tourism Development and Investment Company (TDIC), the master developer of Saadiyat Island, has sold 285 apartments to a joint venture between the United States-based property investor Pramerica and the Abu Dhabi state investment fund Mubadala.
In a stock market announcement yesterday the companies announced that the 50/50 Mubadala Pramerica Real Estate Investors (MPREI) joint venture had bought the entire first phase of Saadiyat Beach Residences gated community for an undisclosed sum.
The three five-storey blocks of flats, which were completed last year and are 80 per cent let, will be owned by MPREI. But under the terms of the deal, the property is subject to a five-year leaseback to TDIC, the master developer of major tourism, cultural and residential destinations in Abu Dhabi. TDIC will continue to manage the leasing.
A second phase of 210 flats on the island, which is scheduled to be completed in the third quarter of the year, has not been included in the deal.
The deal represents a key step for MPREI, which was set up in 2010 in an attempt to create investment opportunities for itself and to sell to fund property projects, including affordable residential properties for nurses, engineers, technicians, teachers and other mid-income professionals.
"This transaction demonstrates the quality of the real estate investment opportunities in Abu Dhabi today," said Joe Bonner, the chief investment officer for MPREI. "Saadiyat is becoming a true destination for the region and one which holds the prospect of strong financial returns for our business."
Gaston Urda, of Mubadala and a member of the MPREI board of directors, said: "The real estate market in Abu Dhabi and the broader GCC provides exciting investment opportunities, and through our joint venture we aim to attract long-term investors to the real estate sector."
For TDIC, which last year transferred three of its prime hotel properties to its parent company, the Abu Dhabi Tourism and Culture Authority, in exchange for converting government loans into grants, the extra cash will come as a boost.
TDIC announced a Dh2.1bn loss last year, almost double that of 2011. The company, established in 2006, recorded losses of Dh1.15bn in 2010, Dh551 million in 2009 and Dh368.6m in 2008. More promisingly, revenues rose from Dh333.8m in 2011 to nearly Dh1.3bn last year, and the company ended the year with Dh2.4bn in cash on hand.
The company last year said it was also considering selling packages of land around the proposed New York University campus on Saadiyat to investors.
Ahmed Al Fahim, the executive director of marketing, communications, sales and leasing at TDIC, commented: "This important acquisition by MPREI is a reflection of the high level of interest from global investors in Saadiyat and the local real estate market. We are confident that our exclusive residential communities will continue to attract interest from high-calibre global investors."
lbarnard@thenational.ae
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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Prop idols
Girls full-contact rugby may be in its infancy in the Middle East, but there are already a number of role models for players to look up to.
Sophie Shams (Dubai Exiles mini, England sevens international)
An Emirati student who is blazing a trail in rugby. She first learnt the game at Dubai Exiles and captained her JESS Primary school team. After going to study geophysics at university in the UK, she scored a sensational try in a cup final at Twickenham. She has played for England sevens, and is now contracted to top Premiership club Saracens.
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Seren Gough-Walters (Sharjah Wanderers mini, Wales rugby league international)
Few players anywhere will have taken a more circuitous route to playing rugby on Sky Sports. Gough-Walters was born in Al Wasl Hospital in Dubai, raised in Sharjah, did not take up rugby seriously till she was 15, has a master’s in global governance and ethics, and once worked as an immigration officer at the British Embassy in Abu Dhabi. In the summer of 2021 she played for Wales against England in rugby league, in a match that was broadcast live on TV.
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Erin King (Dubai Hurricanes mini, Ireland sevens international)
Aged five, Australia-born King went to Dubai Hurricanes training at The Sevens with her brothers. She immediately struck up a deep affection for rugby. She returned to the city at the end of last year to play at the Dubai Rugby Sevens in the colours of Ireland in the Women’s World Series tournament on Pitch 1.
Tips for taking the metro
- set out well ahead of time
- make sure you have at least Dh15 on you Nol card, as there could be big queues for top-up machines
- enter the right cabin. The train may be too busy to move between carriages once you're on
- don't carry too much luggage and tuck it under a seat to make room for fellow passengers
Abaya trends
The utilitarian robe held dear by Arab women is undergoing a change that reveals it as an elegant and graceful garment available in a range of colours and fabrics, while retaining its traditional appeal.
