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Kuwait's Markaz nets 27.7pc returns from US property exit

KUWAIT CITY, March 28, 2020

Kuwait Financial Centre (Markaz) has announced the successful sale of Parc Santa Fe, a 344,542-sq-ft industrial property located in Denver, US, for $58 million.
 
Launched in April of 2018, the investment involved the acquisition and development of a greenfield land parcel into a Class-A industrial facility. 
 
The sale of the property, which was in line with the initial investment strategy, delivered a net internal rate of return to investors (IRR) of 27.7% and a Return on Equity (ROE) of 49.6%, said a statement from Markaz.
 
Both return metrics exceeded initial estimates of 11.9% (IRR) and 43% (ROE) driven by strong market selection, excellent project execution and active monitoring & oversight of the project, it stated.
 
Markaz said it has been active in the US real estate market since 1977 with the launching of its first syndicated transaction. Since 1988, Markaz has been conducting real estate transactions in the US through Mar-Gulf, the US real estate arm and a subsidiary of Markaz.
 
"For over 30 years, Markaz continued to strengthen its presence in international real estate markets and we have been able to achieve strong results and witness the growth of our portfolio by building lasting relationships with market leading operating partners, service providers and lending institutions," noted Sami Shabshab, President of Mar-gulf Management. 
 
"Our philosophy is and continues to be sector and strategy agnostic under which we identify and source opportunities depending on market trends and timing," stated Shabshab. 
 
"We have bought, sold, developed and renovated real estate assets across all major sectors
(industrial, office, multifamily and retail). Our main focus is to create value to our investors, shareholders and stakeholders through prudent due diligence, timely acquisitions and worldclass execution," he added.
 
Sadon Abdullah Al Sabt, VP (International Real Estate) at Markaz, reiterated the
company’s continued commitment towards its real estate investment program both in the
US and in Europe. 
 
"This exit is one of a series that have achieved more than the initial expected IRR. In 2019, Markaz successfully exited two development projects within our US development program with returns exceeding original pro-forma expectations," stated Al Sabt.
 
Furthermore, we fully exited one of our distressed debt assets in Arizona and currently have only one remaining. In addition, we broke ground on four different development projects in 2019 including two industrial projects in Europe (Germany and Poland). 
 
"The weighted average IRR generated by international real estate projects reached 19.5% in the current real estate cycle (since 2010)," he explained.
 
Al Sabt said Markaz's current international real estate portfolio consists of 15 standalone
investments worth over $450 million across various markets. 
 
"The full economic implications of the Covid-19 are not yet clear and uncertainty still prevails due to the unprecedented nature of the event. However, our existing portfolio is well positioned to  weather the downturn and strongly recover as the crisis subdues," noted Al Sabt. 
 
"We strongly believe in the long-term value proposition of our investment program, which is designed to capitalize on real estate opportunities in the US and in Europe," he noted. 
 
"The current crisis will no doubt bring to the market unique transactions with significant long term upside which Markaz is ready to capture," he added.-TradeArabia News Service



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