PineBridge Investments LLC, the money manager controlled by Hong Kong billionaire Richard Li, plans to invest about $400 million in real estate across countries including Saudi Arabia and the United Arab Emirates.
A fund focused on the six Gulf Cooperation Council countries will target sale-and-leaseback deals for shopping centers, warehouses and infrastructure such as schools and hospitals, Talal Al Zain, PineBridge’s chief executive officer for the Middle East, said today in an interview. The fund plans to raise $200 million and borrow the rest.
PineBridge’s GCC Real Estate Fund is targeting a market benefiting from population growth, a growing middle class and government spending on education and health care. The International Monetary Fund predicts economic growth in the Middle East and North Africa region to reach 3.8 percent this year. The GCC countries are Saudi Arabia, the U.A.E., Kuwait, Bahrain, Qatar and Oman.
PineBridge’s fund raised $140 million by its first close. All investments by the fund will be sale-and-leaseback deals, Al Zain said. The fund won’t invest in homes or offices, he said. Dubai residential prices climbed 27.7 percent in the 12 months through March, the most in the world, according to a report by Knight Frank LLP.
“We are not part of speculative real estate investments,” Al Zain said. “We are proactively going to owners of properties and businesses and asking them to look at sale and leaseback as an alternative to bank financing for their growth.”
PineBridge is already working on deals for the real estate fund and expects to complete the first of these soon, Al Zain said. In November, the company completed the sale and leaseback of a private school in Dubai owned by GEMS Education, which will be the seed asset for the fund.
“Once we have 75 percent of this fund invested, we will be looking to launch another real estate fund that will have a different mandate,” Al Zain said.
(An earlier version of this story was corrected because Al Zain’s title at the company was misstated.)
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