Arcapita on investments in Saadiyat and beyond

Arcapita, a global investment management firm, recently acquired Phase One of Saadiyat Beach Residences, a premium residential apartment complex in Saadiyat, Abu Dhabi, for a reported $200 million.

Built by Mubadala Development Co., the complex boasts three low-rise buildings in a gated community developed in 2013. The 285 one- to three- bedroom apartments offer high-end facilities and amenities designed to foster a close-knit community. It is under a three-year master lease to the Tourism Development & Investment Co.

Gulf News Journal recently spoke with Mishal Alhellow, a principal at Arcapita, about the company’s recent investment and future plans in the region.

GN: Why was Arcapita interested in acquiring part of the Saadiyat project?

MA: Arcapita believes that the transaction offers investors a unique opportunity to invest in the residential real estate sector in Abu Dhabi, the capital of the [United Arab Emirates], one of the most established economies in the [Gulf Cooperation Council] region. Saadiyat Island is a master-planned community developed by the Tourism Development & Investment Company of Abu Dhabi, a state-owned company. The 27-square-kilometer, multi-faceted island destination features a wide range of luxury-based experiences, including hospitality, leisure and retail, while also providing world-renowned educational opportunities within 500 meters off the coast of Abu Dhabi Island.

GN: Will you be purchasing more of the Saadiyat project?
MA: If opportunities that meet our investment criteria arise, Arcapita will be still interested.

GN: What attracted your company to business investments in Abu Dhabi?
MA: Abu Dhabi has exhibited significant and consistent economic development and growth during the past years. The non-hydrocarbon sectors of the economy currently represent 10 percent of [gross domestic products]. The ratio between oil and non-oil GDP growth is currently 50-50, respectively. The growth in non-oil sectors continues to support investment in real estate and infrastructure projects in Abu Dhabi.

Abu Dhabi Island is currently the most densely populated residential district within the Emirate of Abu Dhabi. This influx of residents has paved the way for the emergence of master-planned projects outside Abu Dhabi Island such as Saadiyat Island, Al Raha, Al Reem, Hydra and Al Reef. The real estate market in Abu Dhabi is characterized by a lack of supply in quality residential units offering superior design, parking, amenities and management. Future demand is expected to be fueled by investments and job growth from major construction projects currently underway, such as the airport expansion, Etihad Rail, Saadiyat Island museums and other major infrastructure, economic and social development initiatives combined with general economic expansion.

GN: What is the next step in acquisitions for Arcapita in Abu Dhabi?
MA: Arcapita has been actively sourcing for new real estate deals within the region, which includes Abu Dhabi, that fits our investors’ appetite. Our current focus sectors are residential and logistics.

GN: Is real estate the only sector you are investing in? Why?
MA: Arcapita’s principal lines of business are private equity and real estate. Over 17 years, Arcapita’s management team oversaw more than 70 investments with total transaction value in excess of $30 billion. Our global investment teams continue to identify private equity and real estate transactions that offer our investors attractive returns.

GN: What are Arcapita’s long-term goals in the Gulf region?
MA: Our [Middle East and North Africa] team continues to identify attractive investment opportunities across the region. We look to build on our longstanding track record within the Gulf region. Additionally, on a global basis, we look forward to closing a number of real estate and private equity transactions in the coming months.

GN: How does Arcapita stand out from other investment firms in the Gulf region.
MA: Arcapita originates global alternative investments that comply with Shari’ah principles for its investors and shareholders. At the center of one of the fastest growing wealth markets in the world, Arcapita serves an exclusive group of investors in the GCC region and Southeast Asia. With offices in Bahrain, Atlanta, London and Singapore, Arcapita possesses a footprint to invest on a global scale.