Investcorp makes $164m addition to US property portfolio

Bahrain-based asset management company acquires two residential buildings in south Florida

Investcorp on Monday said it closed a new fund with €318 million in commitments . Courtesy Investcorp

Bahrain-based alternative asset manager Investcorp invested $164 million (Dh602.4m) to acquire two properties in the US as it continues adding to its portfolio of real estate investments in the country.

Through its real estate team in the US, Investcorp bought two residential properties in south Florida as it builds on its US multifamily portfolio, the company said on Monday.

"Over the last several years, we have been actively building our US multifamily real estate portfolio by targeting properties in strategic locations that enable us to capitalise on the secular trend toward renting rather than home ownership,” said Yusef Al Yusef, head of the Gulf institutional clients group at Investcorp.

“The purchase of these properties in the attractive south Florida market aligns with our defined investment strategy of targeting strong cash flow generating assets that we believe are positioned to generate consistent returns while providing upside potential.”

The Manama-listed Investcorp ranked as the second-biggest international buyer of US multifamily properties in 2019, according to Real Capital Analytics.

Multifamily property portfolios represent the largest part of Investcorp’s global real estate portfolio, with an approximate value of $2.3 billion. The portfolio is made up of 18 buildings containing more than 14,000 units in 15 markets. Since inception, the value of Investcorp’s real estate investments have totalled more than $18bn across about 800 properties.

The purchase of the two apartment properties in south Florida provides Investcorp with a 95 per cent occupied portfolio of 836 units.

The properties are in neighbourhoods with a number of retail and entertainment attractions and are close to downtown Fort Lauderdale and south Florida’s employment hubs.

"The south Florida metropolitan area benefits from a strong, growing and diversified economy with a lower unemployment rate and higher job growth expectations compared to the US national average," Investcorp said.

The Bahraini company, which counts Mubadala Investment Company as its biggest shareholder, said in November it bought a portfolio of 126 industrial properties in the US for $800m. The transaction represents the biggest real estate acquisition by the company at the time.

Established in 1982, Investcorp is one of the oldest Middle East alternative asset managers with $31.1bn of assets under management as of December 31, 2019, according to its half-year accounts.

Last year, Investcorp entered into a partnership with Dock Square Capital – a company founded by former Florida governor Jeb Bush – to expand its business in the US.