Golf fund tees off in capital

The Saadiyat Beach golf course in the capital has been designed by the South African champion Gary Player.

Abu Dhabi investors are providing as much as half of the capital for a US$1 billion (Dh3.67bn) fund targeting well-known golf courses around the world, says the chief of the company behind the investment plan. Marc Player, the chief executive of The Gary Player Group, said the company was seeking private and institutional investors, and had raised $500 million from investors based in the emirate.

The group's fund is seeking to acquire "iconic resorts where there are existing hotel, residential, golf amenities that have been over-capitalised", said Mr Player, the eldest son of the veteran South African golf star Gary Player. Property developers across the Gulf have spent billions of dollars building golf resorts branded by top players including Tiger Woods, Ernie Els and Colin Montgomerie. But the decline in property prices has sapped investor demand.

"We see this as a perfect storm," said Mr Player, speaking on the sidelines of the KPMG Golf Business Forum in Belek, Turkey. "There may not be a lot of guys hiring us to design golf courses but maybe we can acquire the ones that are distressed." Giovanni Gregoratti, the director of Citi Real Estate and Lodging Group, said there were a number of golf properties that had strong fundamentals but could not be funded in the current economic climate.

"Smart investors will plug those holes," Mr Gregoratti said. Gary Player designed the Saadiyat Beach golf course that opened this year in Abu Dhabi. Gary Player Design has been appointed to design several golf projects in Abu Dhabi and elsewhere in the Gulf, including Dubai and Qatar, which have yet to be announced, Mr Player said. The fund is in discussions with the owners of courses that include Dubai World's Turnberry Resort in Scotland and the Sea Island resort in Georgia.

The Turnberry Resort, which hosted last year's British Open, is owned by the Dubai World unit Istithmar. It also owns the Pearl Valley Signature Golf Estate and Spa, a 170-hectare championship golf course development in the Cape Winelands region of South Africa. Analysts said there were good opportunities for cash-rich investors to step in and buy golf resorts that the current owners were struggling to fund.

"I think it's a major opportunity and it's the right timing," said Andrea Sartori, a partner at KPMG property, leisure and tourism advisory services. "This economic situation provides quite a few opportunities for the development of funds which are going to focus either on the development of golf courses, or more on the acquisition of distressed assets." Mr Sartori said some might also choose to buy stand-alone courses.

"It's not necessarily only in the high-end market. There are also opportunities in the mid-scale sector as well." He added that prices for golf assets now available were particularly attractive. "Prices are relatively depressed at the moment. It doesn't mean necessarily that those assets are distressed assets." [e-mail]