GFH Financial Group, an investment bank based in Bahrain, has acquired a portfolio of medical offices in the US in a deal valued at $200 million, expanding its real estate portfolio in the world's largest economy.
The medical offices portfolio consists of 11 assets with more than 400,000 square feet of space and is spread across North Carolina, South Carolina, Georgia, Utah, Wisconsin, Ohio and Texas, the company said in a statement on Tuesday.
The Sharia-compliant deal brings the value of the GFH group’s US healthcare portfolio to over $400 million.
Medical offices refers to facilities leased to outpatient medical and related services. These include different specialisations of medicine, labs and ancillary medical services.
“The pandemic has underlined a need for more outpatient services and continued demand for healthcare services. As a result we are seeing strong investor sentiment in the medical offices sector,” said Nael Mustafa, co-chief investment officer — real estate, at GFH.
“This trend is particularly true in the US, where healthcare spending comprises around 18 per cent of [gross domestic product], compared to around 10 per cent for most other developed countries.”
Investment in medical offices has quadrupled over the last decade and medical office closings accounted for nearly 30 per cent of all US office sales for the year ending in March 2021, GFH said without citing sources.
Some of the assets that GFH acquired are leased to major healthcare operators such as Cleveland Clinic, Texas A&M Health Science Centre, Novant Health, Spartanbrug Regional Healthcare System, Texas Health Resources and Baylor Scott & White Health.
These buildings are positioned on hospital campuses or near hospitals, allowing it to tap into the sector, the company said.
GFH is boosting its investments in the US in a bid to tap into post-pandemic opportunities.
Earlier this year, it acquired a $100m student housing portfolio affiliated with several top universities in the US as part of its expansion plans. The company acquired a residential tower in Baltimore in a joint venture with Broadshore Capital Partners for $90m in October. In November, it leased 14 logistics assets to Amazon in the US.
GFH also bought a US warehousing and distribution logistics centre for $100m in June.
The investment bank more than doubled its net profit on an annual basis for the third quarter of 2021, underpinned by a strong performance in the group's business lines.
Net profit attributable to the shareholders of the bank in the three months to September 30 surged by 187.3 per cent to $23.3m, from $8.1m in the third quarter of last year.
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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.”
Who's who in Yemen conflict
Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council
Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south
Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory
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How to keep control of your emotions
If your investment decisions are being dictated by emotions such as fear, greed, hope, frustration and boredom, it is time for a rethink, Chris Beauchamp, chief market analyst at online trading platform IG, says.
Greed
Greedy investors trade beyond their means, open more positions than usual or hold on to positions too long to chase an even greater gain. “All too often, they incur a heavy loss and may even wipe out the profit already made.
Tip: Ignore the short-term hype, noise and froth and invest for the long-term plan, based on sound fundamentals.
Fear
The risk of making a loss can cloud decision-making. “This can cause you to close out a position too early, or miss out on a profit by being too afraid to open a trade,” he says.
Tip: Start with a plan, and stick to it. For added security, consider placing stops to reduce any losses and limits to lock in profits.
Hope
While all traders need hope to start trading, excessive optimism can backfire. Too many traders hold on to a losing trade because they believe that it will reverse its trend and become profitable.
Tip: Set realistic goals. Be happy with what you have earned, rather than frustrated by what you could have earned.
Frustration
Traders can get annoyed when the markets have behaved in unexpected ways and generates losses or fails to deliver anticipated gains.
Tip: Accept in advance that asset price movements are completely unpredictable and you will suffer losses at some point. These can be managed, say, by attaching stops and limits to your trades.
Boredom
Too many investors buy and sell because they want something to do. They are trading as entertainment, rather than in the hope of making money. As well as making bad decisions, the extra dealing charges eat into returns.
Tip: Open an online demo account and get your thrills without risking real money.
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