Gems Education has sold the long lease of one of its biggest schools in Dubai to Emirates Reit, its second sale-and-leaseback deal in as many weeks.
It comes as the world’s biggest private school operator prepares to raise as much as US$500 million to fund a global school-building programme.
The UAE real estate investment trust will own the facilities and related assets of Gems World Academy in Dubai.
Abdulla Ali Al Hamli, Emirates Reits’ chairman, said: “We set out to grow our assets under management to over Dh1 billion this year and this acquisition continues our strong momentum, following quickly after the purchase of the Index Tower Retail in the DIFC.”
Gems said it would continue to operate and manage the property and there would be no impact on school operations.
Earlier this month, Gems Education entered into an agreement with PineBridge Investments to sell its first Dubai property, an undisclosed school campus, and to lease and manage it.
PineBridge is a global asset manager that was spun off from the United States insurer AIG in 2010.
The values of the two transactions were not disclosed.
In the past decade, sale-and-leaseback deals became popular as companies sought to realise value from their property assets to reinvest in their businesses.
But the funding model came in for criticism following the Southern Cross Healthcare crisis in Britain in 2011.
At the time, thousands of elderly Britons were facing eviction after the country’s biggest nursing homes operator undertook a sale-and-leaseback of hundreds of its care homes but became unable to pay its rental obligations.
In the Arabian Gulf, sale and leaseback deals have been rare, as businesses have typically preferred to retain ownership of their buildings.
Gems Education last month announced a $500m debut bond sale to fund plans to build 21 schools around the world over the next three years and to expand capacity at another 10 existing institutions.
Nick Guest, the company’s chief financial officer, said that it was a continuation of its growth strategy.
“We continue to invest in high-quality new schools,” he said. “However, a natural solution to allow further growth is to partner with property funds and investors such as PineBridge Investments Middle East, who recognise the importance and stable nature of the education sector within the UAE.”
Gems World Academy was founded in 2008 and has 1,800 students.
halsayegh@thenational.ae
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2025 Fifa Club World Cup groups
Group A: Palmeiras, Porto, Al Ahly, Inter Miami.
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5pm: Maiden (PA) | Dh80,000 | 1,200 metres
Winner: Jabalini, Szczepan Mazur (jockey), Younis Kalbani (trainer)
5.30pm: UAE Arabian Derby (PA) | Prestige | Dh150,000 | 2,200m
Winner: Octave, Gerald Avranche, Abdallah Al Hammadi
6pm: Arabian Triple Crown Round 3 (PA) | Group 3 Dh300,000 | 2,200m
Winner: Harrab, Richard Mullen, Mohamed Ali
6.30pm: Emirates Championship (PA) | Group 1 | Dh1million | 2,200m
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7pm: Abu Dhabi Championship (TB) | Group 3 | Dh380,000 | 2,200m
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7.30pm: Wathba Stallions Cup (PA) | Conditions | Dh70,000 | 1,600m
Winner: AF La’Asae, Tadhg O’Shea, Ernst Oertel
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The specs
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Transmission: CVT
Power: 170bhp
Torque: 220Nm
Price: Dh98,900
Other ways to buy used products in the UAE
UAE insurance firm Al Wathba National Insurance Company (AWNIC) last year launched an e-commerce website with a facility enabling users to buy car wrecks.
Bidders and potential buyers register on the online salvage car auction portal to view vehicles, review condition reports, or arrange physical surveys, and then start bidding for motors they plan to restore or harvest for parts.
Physical salvage car auctions are a common method for insurers around the world to move on heavily damaged vehicles, but AWNIC is one of the few UAE insurers to offer such services online.
For cars and less sizeable items such as bicycles and furniture, Dubizzle is arguably the best-known marketplace for pre-loved.
Founded in 2005, in recent years it has been joined by a plethora of Facebook community pages for shifting used goods, including Abu Dhabi Marketplace, Flea Market UAE and Arabian Ranches Souq Market while sites such as The Luxury Closet and Riot deal largely in second-hand fashion.
At the high-end of the pre-used spectrum, resellers such as Timepiece360.ae, WatchBox Middle East and Watches Market Dubai deal in authenticated second-hand luxury timepieces from brands such as Rolex, Hublot and Tag Heuer, with a warranty.
White hydrogen: Naturally occurring hydrogen
Chromite: Hard, metallic mineral containing iron oxide and chromium oxide
Ultramafic rocks: Dark-coloured rocks rich in magnesium or iron with very low silica content
Ophiolite: A section of the earth’s crust, which is oceanic in nature that has since been uplifted and exposed on land
Olivine: A commonly occurring magnesium iron silicate mineral that derives its name for its olive-green yellow-green colour
SPEC%20SHEET
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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ONCE UPON A TIME IN GAZA
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Rating: 4.5/5
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Marcel Sabitzer 10', 21'
Emil Forsberg 87'
Tottenham 0
