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Distressed property fund launched in UAE |
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Wednesday August 5 2009
Dubai: Financial and investment
advisory services provider, Mayfair Wealth Management (MWM), which is
based in the Cayman Islands, Tuesday announced the launch of a new
Sharia-compliant distressed property fund, worth $50 million (Dh183.7
million) in the UAE.
The move is thought to be motivated by
attractively low valuations in the UAE real estate market, which is
undergoing a price correction. The Real Estate Musharakah Notes fund is
expected to deliver an annual return of 12 to 15 per cent by way of
"leasing or rental income throughout the tenure of the notes, at their
best prices", according to a company statement.
The distressed property fund is available for subscription until August 31, with a maximum tenure of 36 months at $1 per share.
The company said the fund would be used to acquire properties in diverse locations in a bid to mitigate risks.
The
number of defaulted or distressed assets have set up an attractive
market for such funds. The term "distressed assets" generally applies
to those properties whose value is much lower than it should be.
"Typically
these types of funds will be some of the first players to enter the
market after a downturn and as such they have come to signify the first
small steps towards recovery," Matthew Green, Head of Research &
Consultancy, CB Richard Ellis Middle East, said.
"In this respect we would anticipate some increased fund activity towards the year end."
Source: Zawya
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